New economic aid in the Corona crisis

Corona assistance has again been readjusted and extended. In addition to the new November/December aid, the bridging aid is extended and expanded until June 2021.

Due to the drastic increase in the number of infections, the federal and state governments ordered a partial lockdown from November, which has now been significantly extended at short notice and extended into the new year. As a result, the federal government has not only extended and expanded existing aid programs for the economy, but has also decided on additional extraordinary economic aid for businesses particularly affected by the lockdown.

Here is a quick overview of the improvements and newly launched aid programs. We have also compiled the details on economic aid for November and December for you in another post and summarized the changes to Bridging Aid III in a third post.

• November/December Aid: The extraordinary federal economic aid will support the companies, self-employed, associations and institutions whose business will be temporarily closed due to the measures required to cope with the pandemic, as well as those indirectly but comparably affected by the orders. Up to a maximum of 1 million euros per business, grants will be awarded per week of closure of 75 % of average weekly sales in November or December 2019.

  

• Bridging Assistance: Bridging Assistance II will run until December 31, 2020. It will be extended and expanded as Bridging Assistance III until the end of June 2021 and is also aimed at companies affected by the additional closure decisions of December 13, 2020. There will be further improvements, e.g. in the deductibility of expenses for maintenance, modernization measures or depreciation. Instead of the previous maximum of 50,000 euros, up to a maximum of 500,000 euros in operating cost reimbursement per month will be possible in the future.

• Restart help: Together with the Bridging Assistance III also comes a new start-up assistance for solo self-employed persons. With this new start-up aid, solo self-employed persons who have often not been able to claim any operating costs will receive a one-time operating cost lump sum of up to 5,000 euros for the period until the end of June 2021 as a taxable subsidy. The full operating cost lump sum is granted if the turnover from December 2020 to June 2021 has decreased by more than 50 % compared to a seven-month reference turnover in 2019. It is to be paid as an advance, even if the specific revenue losses have not yet been determined when the application is submitted. Due to the necessary technical preparatory work and coordination with the countries and the EU Commission, applications can be submitted a few weeks after the start of the program in the new year. Because it is earmarked for a specific purpose, the new start-up aid cannot be offset against basic benefits.

• KfW loans: KfW's special program - including the KfW fast loan - has been extended for the time being until June 30, 2021. In addition, the KfW fast loan is now also available to solo self-employed persons and companies with up to 10 employees. Via their principal bank, companies can apply for these KfW loans of up to 25 % of their annual turnover in 2019, up to a maximum of EUR 300,000 for companies with up to 10 employees. The federal government assumes the full risk for this and releases the house bank from liability. The rules for repaying KfW fast loans have also been improved. In particular, early repayment on a pro rata basis is now possible without an early repayment penalty. This makes it easier to combine with other Corona assistance programs.