The coronavirus crisis is not only bringing public life to a standstill, but also affecting the economy. Self-employed people and small business owners in particular are threatened by COVID-19, which is why the federal government and Bavaria are offering financial support.
Attention: The Bavarian Ministry of Economic Affairs is currently warning entrepreneurs about fake emails regarding emergency aid for the coronavirus. Specifically, this is an email supposedly sent by the ministry with the subject line "Corona Subsidy – Confirmation and Instructions." It asks companies to fill out a certificate for the tax office and return it to the sender. This is a fake message; the Bavarian State Criminal Police Office has already been contacted. The Ministry of Economic Affairs clarifies that any written inquiries regarding emergency aid applications will be handled by the responsible district government or the state capital of Munich. Official emails from the Ministry of Economic Affairs regarding emergency aid originate from the email address noreply@soforthilfe-corona.bayern. (Update from May 5, 2020)
The City of Munich's Referat für Arbeit und Wirtschaft (RAW) has summarized all the important information on economic aid for companies in times of COVID-19. This overview, which is constantly updated by the RAW, contains information on current resolutions and explains specific measures. The Chamber of Commerce and Industry for Munich and Upper Bavaria has put an overview page online on this topic.
Financial support due to COVID-19
Companies affected by COVID-19 can receive financial support:
Companies that are in immediate need receive unbureaucratic Emergency aid from the Bavarian governmentThe emergency aid is aimed at companies that are experiencing liquidity bottlenecks and are therefore unable to meet their current obligations. Available liquid capital must be used before claiming the emergency aid.
The Application for “Corona Emergency Aid" is for companies in the Munich city area at the RAW (Residential Building Authority) of the City of Munich. If the company is located in the Munich area, the City of Munich is not responsible, but the Government of Upper Bavaria. The amount of emergency aid is staggered according to the number of employees: up to 5 employees receive a maximum of 5,000 euros, up to 10 employees a maximum of 7,500 euros, up to 50 employees a maximum of 15,000 euros, and up to 250 employees a maximum of 30,000 euros. Over 203,000 applications have now been received by the Free State of Bavaria, and more than 204 million euros have already been paid out. Applications are now submitted via a new Online portal. (Update from March 31, 2020)
Thanks to the federal government's COVID-19 support, the conditions here have now changed: Emergency aid for the self-employed, freelancers, and small businesses, including farmers, with up to five employees has been increased to up to €9,000, or up to €15,000 for ten employees. This aid is fully funded by the federal government. In return, the Free State of Bavaria is increasing support for larger companies: companies with up to 50 employees will receive a maximum of €30,000 in the future, and companies with up to 250 employees will receive up to €50,000. Anyone who has already submitted a funding application through the Bavarian program but needs more money should be able to submit an amendment application in about four weeks, so that they receive the difference between the emergency aid received so far and the higher funding amount in the future. (Update as of March 31, 2020)
In Bavaria, from April 20, agricultural businesses with primary production and commercially active limited liability companies (GGmbHs) such as educational institutions, club cafés, youth centers, nursing homes, or women's shelters with more than 10 employees can also receive emergency aid. However, it should be noted that submitting an application before April 20, 2020, will result in a rejection due to systemic reasons. (Update from April 20, 2020)
Loans
With universal loans, emergency loans, and default guarantees for loans to medium-sized enterprises and freelancers, LfA Förderbank Bayern offers proven programs. For this purpose, the Free State of Bavaria has increased LfA's guarantee framework from €500 million to €2 billion. The prerequisite for supporting companies is a fundamentally viable business model and the willingness of the principal banks to integrate LfA's funding offers into their overall financing. An overview of all loan programs is available on its website. WebsiteIt also offers free advice. Hotline: 089 / 21 24 – 10 00.
With the new Quick loan LfA now also offers a loan with 100 percent liability exemption, which means that the Development Bank assumes all guarantees. Companies with up to five employees can receive up to €50,000 with the loan, and up to ten employees can receive up to €100,000 (less the Corona emergency aid in each case). Commercially oriented companies, sole proprietors, and members of the liberal professions with up to ten employees who have a permanent establishment or branch in Bavaria are eligible to apply. They must also have been active on the market since at least October 1, 2019, and not have been listed as a company in difficulty according to the EU definition until December 31, 2019. Furthermore, the company must have made a profit for the years 2017 to 2019 or in 2019. Companies in which private equity investors participate can also receive funding, regardless of the size of their investment. Applications and disbursements are handled through your main bank. The LfA summarizes all important information. here together. (Update from May 5, 2020)
The Kreditanstalt für Wiederaufbau (KfW) also offers KfW Entrepreneur Loans and ERP Start-up Loans. Companies can apply for these at banks and savings banks. Depending on the loan term, interest rates for small and medium-sized enterprises range from 1.00 to 1.46 percent, and for larger companies, they range from 2.00 to 2.12 percent. KfW has set up a hotline for commercial loans: 0800 539 9001.
The EU Commission has now authorized the assumption of 100 percent state guarantees for loans. Previously, a maximum of 90 percent of liability was possible, with the remainder remaining with the bank. However, since many companies are considered uncreditworthy in the current crisis, the funds from the special loan programs did not reach them. Furthermore, the banks' credit checks are very extensive, which lengthens the process. The new regulation allows loans to be processed much more quickly; usually, just a "quick check" is sufficient. The German government plans to fully assume liability for loans up to €500,000. The new EU Commission regulation even allows this for loans up to €800,000. (Update from April 6, 2020)
In addition, economically healthy companies Guarantees for working capital loans be made available.
Direct help from the federal government
The Federal Government has also decided on far-reaching aid: As Finance Minister Scholz (SPD) and Economics Minister Altmaier (CDU) announced, the federal government intends to take on 156 billion euros in new debt in a supplementary budget. 50 billion euros of this is earmarked to support the self-employed and micro-enterprises. Self-employed individuals and companies with up to 5 employees will receive a one-off payment of 9,000 euros for 3 months, and 15,000 euros for companies with up to 10 employees. The funds do not have to be repaid; however, the prerequisite is that the company was not in financial difficulty before March and that the damage did not occur until after March 11. The program supplements the programs of the federal states, so applications must be processed in the individual federal states. The Federal Ministry of Finance publishes all application details on this website. In addition, self-employed individuals and artists will receive easier access to Hartz IV benefits. (Update from March 25, 2020)
In Bavaria, the administrative districts and the state capital of Munich are responsible for the federal funds. The authorities are already processing applications for the support granted by the Free State. As the Bavarian Ministry of Economic Affairs If the Bavarian aid already paid out is credited to the federal funds, for example, a company with 10 employees has already received the maximum amount of 7,500 euros from the Free State, it can claim a maximum of an additional 7,500 euros from the federal government. Applications are submitted via a Online portal. (Update from March 30, 2020)
In addition, the two ministers are planning a rescue package of up to €600 billion to provide relief to larger companies. This consists of €400 billion in federal guarantees to secure business loans, and a further €100 billion is available for state investments in struggling companies. An additional €100 billion will be used to refinance the liquidity aid provided by KfW Bank. (Update from March 23, 2020)
The Bundestag and Bundesrat have now approved all measures. According to information from ZDF, the first funds should reach those affected before April 1. (Update from March 30, 2020)
The aid package for startups worth two billion euros announced by Federal Finance Minister Olaf Scholz on 1 April has also been decidedThe distribution of funds is organized in two pillars: For startups with VC, the VC must turn to KfW Capital or the European Investment Fund (EIF). This provides additional capital through the so-called Corona Matching Facility. Only private VC funds are eligible to apply. Young companies without VC will receive support through a network of state development banks, SME investment companies, and business angel networks. However, this pillar is still under development. The Federal Ministry for Economic Affairs and Energy has published all the details in a PDF summarized. (Update from May 11, 2020)
Special help for startups
After a alarming survey Following a resolution passed by the German Startups Association, the German federal government has decided to support the German startup landscape with an additional €2 billion. This funding will flow, on the one hand, to venture capitalists such as the High-Tech Gründerfonds in the form of additional public funds. On the other hand, the fund-of-funds investors KfW Capital and the European Investment Fund (EIF) will be enabled to acquire shares from defaulting fund investors with additional public funds. Furthermore, financing with venture capital and equity-substituting forms of financing will be made easier for young startups without venture capitalists among their shareholders and for small and medium-sized enterprises. In the medium term, the federal government intends to support the path out of the crisis with the Future Fund for Startups, which was already approved last year. (Update from April 2, 2020)
Short-time work allowance
Since the Federal Employment Agency (BA) has significantly lowered the hurdles for applying for short-time work benefits, support can be applied for even if 10 percent of the workforce is unavailable. If an employer places employees on short-time work, the employer will cover 60 percent of the lost net wages; for employees with children, the figure is 67 percent. In addition, the payment period has been extended from 12 to 24 months, and it can be granted retroactively to March 1, 2020. Short-time work benefits can be applied for. applied for online at the BA become.
In addition, the Party leaders of the governing coalition agreed on further adjustments to short-time work benefits. Those who work at least half of their hours on short-time work due to the coronavirus crisis will receive 70 percent of their net salary from the fourth month (77 percent if they have a child), and 80 percent from the seventh month (87 percent if they have a child). Furthermore, employees on short-time work will be allowed to earn up to the full amount of their previous income starting May 1. The regulations initially apply until the end of the year. (Update from April 24, 2020)
Deferrals of taxes, social security contributions and reduced trade taxes
The RAW provides further information on the possibility of tax relief. To avoid liquidity bottlenecks, advance payments can be easily adjusted by the tax authorities if it is clear that taxpayers' income is expected to be lower in the current year.
One alternative is tax deferrals for companies. These are primarily intended for companies that no longer have the necessary funds to meet their payment obligations as a result of COVID-19. This includes, among other things, lost sales, lost revenue opportunities, and investments already made, such as for trade fair construction. The deferral must be applied for at the City Treasury (SKA).
Social security contributions can also be deferred if immediate collection would cause significant hardship for the company, such as serious financial difficulties. The health insurance company then decides on the deferral.
Taxpayers can submit an application for a reduction in trade tax advance payments, citing the expected deterioration in profit situation for the current financial year, either to the responsible tax office or to the municipal treasury SKA 4.1 trade tax.
Refunds from the tax office
Thanks to a new regulation, small and medium-sized enterprises can offset their foreseeable losses in 2020 against their 2019 taxes. This is possible up to a maximum of 15 percent of the expected profit for 2019. The money will be refunded by the tax office. The regulation is based on a Agreement in the coalition committee back. (Update from April 24, 2020)
Help with crowdfunding projects
Crowdfunding was already a popular tool for financing projects or products before the Corona crisis. Now, the RAW (Public Relations Office) of the City of Munich has adjusted the conditions for its crowdfunding program in response to the Corona crisis. Effective immediately, a grant of 90 percent of the costs (up to a maximum of €3,000) can be awarded for creative services required for campaign preparation (such as film production, logo, PR, or text). Previously, the grant was limited to 50 percent. The offer is expected to be valid until the end of May 2020 and is aimed at the local cultural and creative industries. Many crowdfunding platforms have also responded to the new challenges and Special formats to support project starters, which can be combined with the crowdfunding support program of the City of Munich. (Updated April 9, 2020)
Deferment of rent payments
Part of the federal government's legislative package to combat the coronavirus crisis also addresses rent payments. It provides for a three-month deferral of rent payments for tenants and business owners who are in arrears with rent due to COVID-19. Tenants can normally be evicted if they fail to pay two months' rent. However, tenants must prove that the coronavirus pandemic is the cause of their rent arrears. Landlords, in turn, are being supported with a three-month deferral of loan payments to prevent them from getting into trouble themselves due to the loss of income. (Update from March 24, 2020)
Promotion of home office spaces
The Federal Ministry for Economic Affairs and Energy has launched a new home office funding program for small and medium-sized enterprises in the commercial sector and the skilled trades. This program allows companies to receive funding for IT services needed to set up home offices. This includes the construction and setup of the necessary hardware, as well as the use of software that goes beyond standard standards. Companies wishing to benefit from the funding must first arrange a free initial consultation with a consulting firm. This firm will then handle all subsequent steps, from applying for funding to setting up the home office workstations.
Coverage of costs for business consulting
Companies that have found themselves in financial difficulty due to COVID-19 and wish to seek support from a business consultant can now apply for federal funding. The Federal Office for Economic Affairs and Export Control (BAFA) will cover 100 percent of the costs up to a maximum of €4,000 net. The company will pay the VAT but will be reimbursed. The application can be submitted online. on-line be submitted. (Updated April 9, 2020)
Further information
Also the Chamber of Commerce and Industry has compiled a similar overview. In addition to the topics outlined above, it also highlights contract and travel law issues, the impact of border closures on transport and logistics, and the possibility of export insurance through Hermes coverage. Internal measures to combat COVID-19 are also an important topic. The German Startups Association also offers an overview, with some Best practices.
