From start-up to scale-up, every project needs funding to continue its growth. Tax shelter, crowdfunding, growfunding... These alternative solutions each have their own contribution to make, but you still need to pick the right one to suit your needs.
To launch a business or project, you need ideas, a business plan, a strategy, energy and, above all, a good dose of oxygen. And in the entrepreneurial world, oxygen often means money. While banks have long played the role of financial sherpa, new, more accessible options are now emerging. Tax shelter, crowdfunding, growfunding... these alternative solutions offer a different, more collective, more committed approach to financing. But how do they work, and why are they changing the game?
Tax shelter: the win-win combo
For Belgian start-ups, the tax shelter has all the benefits of a launch pad. This tax mechanism, introduced to encourage investment in young companies, allows individuals to invest in a start-up while benefiting from a tax reduction of up to 45%. According to the Federal Public Service for the Economy, this reduction can also be applied to scale-ups (fast-growing companies), with a tax reduction of 25% of the amount invested.
In short, it works like a win-win call for partners: entrepreneurs recover funds to develop their business, while investors see their tax bill melt away. This system creates a dynamic that reassures both sides. According to the FPS Economy, the tax shelter extends to various sectors, including commerce, information and communication, the cultural sector and specialised, scientific and technical activities.
Crowdfunding: participatory financing
Crowdfunding is no longer about convincing a bank or an investor, but about rallying a community around an idea. Thanks to online platforms, entrepreneurs can raise funds in three ways:
- Donations: to support a project without expecting anything in return;
- Crowdfunding (crowdlending): a repayable loan, with or without interest;
- Equity investment (crowdequity): contributors become shareholders in the project.
A crowdfunding campaign can also be used to test your project with the public, engage your community and create a positive buzz.
Growfunding or civic crowdfunding
Growfunding is crowdfunding's committed little sister. Here, people finance meaningful projects: social initiatives, zero-waste cafés, local cultural spaces, etc. This model combines fundraising with social and local commitment.
Also known as civic crowdfunding, it is further distinguished by matchfunding, a collaboration between businesses and growfunding campaigns. Companies use these platforms to support projects with a social and local impact. In return, they gain visibility and strengthen their CSR (corporate social responsibility) programme.
Restaurant chain Exki and investor Extensa are two examples of matchfunding. These two companies worked with the Growfunding.be platform to finance the PermaFungi social cooperative. This initiative recycles coffee grounds to produce mushrooms in Brussels, while creating jobs and contributing to the ecological transition. Their aim is to create a social and environmental impact by integrating young people into the labour market and through recycling.
Government financing
Alongside private or collaborative solutions, government financing options also exist to support businesses. A number of schemes can be put in place: grants, repayable advances or even bonuses dedicated to innovation and job creation. This public support is particularly useful when starting up a business or during the growth phase.
They enable companies to reduce their financial risks, secure their projects and sometimes obtain bank loans more easily. Programmes such as RISE UP or OPEN UP or Finance&invest.brussels in Brussels, for example, provide solutions tailored to the needs of entrepreneurs.
In conclusion
Every solution, from tax shelters to crowdfunding and public funding, helps entrepreneurs to secure their projects while minimising the risks. Of course, there are plenty of other options, from microcredit to business angels, incubators and regional funds.
Choosing a funding model is not just a question of money, although money does play a major part. It's a way for entrepreneurs to lay the foundations of a project, make it known and test it. In short, alternative sources of funding reflect a new way of thinking about entrepreneurship. They are more accessible and more collective, allowing promising ideas to emerge and grow.