Emergency Aid Measures for Companies in the Coronavirus Crisis
The current coronavirus pandemic will hit the economy hard: current scenarios and forecasts predict a deep recession, the consequences of which will be all the more serious the longer the restrictions imposed on public life continue. Added to this is the collapse of global supply chains, which is hitting Germany particularly hard due to its high degree of involvement in the international division of labor. Against this backdrop, the country’s federal and state governments have decided on numerous aid measures for companies that have now found themselves in an emergency situation through no fault of their own.
Federal Funding and State-Level Aid
- Soforthilfen für Unternehmen in Form von Zuschüssen (06.04.2021, in German)
- Kredite (06.04.2021, in German)
Following on from the emergency aid and bridging aid it provided during the first and second phases of the pandemic, the German federal government is currently providing third-phase bridging aid. This will be available until the end of June 2021 to companies, the self-employed, and members of the liberal professions, so that they can continue to cover their fixed operating costs in the event of pandemic-related loss of income. The maximum grant available as part of this third-phase bridging aid is EUR 1.5 million per month. The federal government has expanded fixed-cost reimbursement from a maximum of 90 percent to a possible 100 percent. Furthermore, companies can now receive an additional equity grant of up to 40 percent of the funding for bridging aid III. Instead of bridging aid III, the solo self-employed and companies can also claim “new start” aid (Neustarthilfe) in the amount of EUR 7,500 euros. Moreover, any companies, businesses, self-employed, associations, and institutions directly or indirectly affected by the closure orders in November or December 2020 can still apply for November and December aid until the end of April 2021. This support is intended to compensate for 75 percent of the loss of sales. In addition, for those who are not eligible to apply for November and/or December aid, there is the “November and December window” covered by bridging aid III. This support amounts to a maximum of EUR 200,000 per month. Hardship assistance is available to companies that are severely affected by the coronavirus pandemic due to their special circumstances but are not covered by existing assistance programs.
There are now hardly any differences among the individual federal states regarding the additional subsidies they are providing. For example, Baden-Württemberg, Mecklenburg-Western Pomerania, Lower Saxony, North Rhine-Westphalia, and Thuringia had granted an increase of the bridging aid II equal to a hypothetical entrepreneur’s salary, but this will be discontinued. In addition to KfW credit offers, which are available to all Länder, credit offers from development banks (Förderbanken) are also available in all federal states. These are especially attractive because they offer favorable interest rates and a high level of exemptions.
