For a new business, financing is a critical issue that will have a major influence on its development. The principal sources of capital are a business' own equity capital and borrowing. Businesses may also make use of specific financial aid.

Starting a business means taking risks: indeed, the initial equity capital often consists of the entrepreneur's personal resources. This is also a means of demonstrating genuine belief in the venture to other investors. Private investors can also contribute to the equity capital. There are many possibilities: personal networks, business angels, venture capital funds, etc. An adequate level of equity capital is also important when applying for a bank loan.

New, innovative businesses may benefit from specific financial aid:

• The start-up/takeover loan ("prêt de création-reprise") offered by the Société Nationale de Crédit et d’Investissement (SNCI) is designed to encourage new entrepreneurs to start up or take over Small and Medium-Sized Enterprises (SMEs).
• The SNCI also offers equipment loans ("crédits d'équipement") to support investments relating to the creation, extension, conversion, reorientation, restructuring and takeover of Luxembourg SMEs
• The Société Luxembourgeoise de Capital-Développement pour les PME S.A. (CD-PME) aims to increase the equity capital and strengthen the capital base of SMEs presenting innovative development projects.
• Aid for young innovative enterprises, granted by the Ministry of the Economy and Foreign Trade, is intended to co-finance the financing requirements of high-growth-potential businesses, which were created less than 6 years ago, during their development phase.

The Ministry of Small and Medium-Sized Businesses and Tourism provides initial investment aid in order to encourage the start-up or takeover of an SME in the context of a first business.

Financial aid intended to support research, development and innovation projects in businesses and investment projects in businesses, can also be useful for young innovative businesses.

Financial aid is requested via the submission of a comprehensive, well-documented application, generally together with a business plan. All financial aid is allocated according to specific eligibility criteria.