Improvements to bridging assistance III

In January, the German government decided on numerous improvements for Bridging Assistance III, which is now open to even more companies and in many cases is higher.

In mid-January, the federal and state governments agreed on improvements to Bridging Assistance III. The adjustments will make bridging assistance III and its application much simpler, the support will be more generous and available to a larger group of companies. In addition, new start-up assistance for the self-employed will be improved and the special challenges of the retail sector will be taken into account. Here is a summary of the most important changes:

• Eligibility to apply: Companies that have suffered a drop in sales of at least 30 % in a month compared to the reference month in 2019 are now eligible to apply. They can apply for Bridging Aid III for the month in question. There is no need to provide proof beyond that. In addition, Bridging Assistance III is now open to companies with annual sales of up to EUR 750 million in Germany. This means that larger medium-sized companies now also have access.

• Funding Period: The funding period now generally covers November 2020 to June 2021. However, double funding is ruled out. Therefore, companies that have received assistance in November or December are not eligible to apply for these two months, and benefits under Bridging Assistance II for these months will be offset.

• Funding Level: The maximum monthly amounts will be significantly increased and standardized. Companies can receive up to 1.5 million euros in bridging aid per month (instead of 200,000 or 500,000 euros). However, the upper limits of European state aid law apply. However, applicants can choose under which state aid regime they apply for Bridging Aid III.

• Progress payments: The maximum amount of advance payments will be raised to 100,000 euros in order to be able to help companies quickly and effectively. The first advance payments are expected in February, with regular disbursement scheduled for March.

• Restart help: Solo self-employed persons can apply a one-time flat-rate operating cost allowance under Bridging Assistance III instead of an individual reimbursement of fixed costs. The terms of this one-time flat-rate operating allowance are significantly improved. It is doubled to 50 % of the reference turnover and the maximum amount has been raised to 7,500 euros (previously 5,000 euros). As a rule, the reference turnover is 50 % of the total turnover in 2019. Thus, the operating cost lump sum is normally 25 % of the annual turnover in 2019. Special rules apply to applicants who started their self-employed activity only from January 1, 2019.

• Eligible Costs: In addition to the conversion costs for hygiene measures, investments in digitization (e.g., setting up or expanding an online store, entry costs for major platforms) are included in the fixed costs. For both areas, costs incurred outside the funding period are now also taken into account. Specifically, appropriate costs of up to 20,000 euros per month incurred in the period from March 2020 to June 2021 will be reimbursed accordingly.

  

• Perishable and seasonal goods: Retailers should not be left to bear the costs of seasonal goods that could no longer be sold or could only be sold with significant losses in value due to the ordered store closure. For perishable goods and for seasonal goods for the 2020/2021 winter season, a special rule will therefore be introduced for retailers, according to which goods depreciation on current assets can be taken into account as fixed costs at 100 %. This concerns, for example, Christmas items, fireworks and winter clothing. But it also concerns perishable goods that become unusable if they could not be sold. Misuse is to be ruled out as far as possible and effective control is to be ensured. The prerequisite is therefore that companies have made a profit from their regular business activities in 2019 and a loss in 2020 and are directly affected by closure orders. In addition, the companies must fulfill documentation and proof obligations for the respective whereabouts or value development of the goods.

• Pyrotechnics: An industry-specific regulation applies to the pyrotechnics industry, which suffered very badly from the breakdown of New Year's Eve fireworks. Here, funding can be applied for the months of March to December 2020. In addition, storage and transport costs can be applied for the period December 2020 to June 2021.

• Travel industry: By comprehensively taking into account the costs and loss of revenue due to cancellations, the burden on the industry is significantly cushioned. The regulations previously provided for have now been supplemented. Thus, external preparation and cancellation costs are increased by a 50 percent flat rate for internal costs and are also taken into account in the fixed costs.