Small and medium-sized enterprises that have had to cease or severely limit their business operations as a result of the coronavirus pandemic can receive comprehensive grants to bridge financial gaps. This support will be extended and expanded for the months September to December 2020. The conditions of access will also be simplified. It has been possible to submit applications since 21 October 2020.

The Federal Ministry of Economic Affairs and Energy and the Federal Ministry of Finance have agreed on how the scheme will be continued in the coming months. The Federal Government will provide a total of around EUR 25 billion for this purpose. 

Furthermore, the bridging aid is open to companies from all sectors that have been severely affected by the coronavirus crisis. In order to better reach particularly those enterprises whose business is still severely hampered by official restrictions or hygiene and social distancing rules, the following changes will be made to the programme:

1. More flexible eligibility threshold 
In future, applicants shall be eligible for bridging aid if they

• have experienced a drop in turnover of at least 50 % in two consecutive months in the period April to August 2020 compared with the same months of the previous year.
• have recorded a drop in turnover of at least 30 % on average in the months April to August 2020 compared to the same period of the previous year.

2. Increase in aid rates
The following will be reimbursed:

• 90 % of fixed costs for those who have lost more than 70 % of their turnover (previously 80 % of fixed costs). 
• 60 % of fixed costs for those who have lost between 50 % and 70 % of their turnover (previously 50 % of fixed costs).
• 40 % of fixed costs for those who have lost more than 30 % of their turnover (previously in the event of a drop in turnover of more than 40 %).

3. The flat rate for personnel costs of 10% of eligible costs will be increased to 20 %. 

4. The maximum amount of the bridging aid will be EUR 50,000 per month. Depending on the level of fixed operating costs, companies will be able to receive up to EUR 200,000 in aid for the four months.

The caps for bridging aid of EUR 9,000 for enterprises with up to five employees and EUR 15,000 for enterprises with up to ten employees will be deleted and not replaced.

5. In future, it shall be possible to receive additional payments following the final settlement of accounts and likewise the State will be able to claim money back

Under the new scheme it will also be possible to apply for aid and to process applications through a fully digitised procedure. The funds will be provided by the Federal Ministry of the Interior, Building and Community, which is in charge of digitising public administration. The application will be made by an “auditing third party”, such as a tax consultant, certified public auditor, chartered accountant or lawyer, who usually already knows the applying company well. Thanks to this pre-check, it will be possible for applications to be decided on and aid to be paid out quickly. Applications will be processed and payments made via the awarding authorities of the federal states.

As at: 6 October 2020

Author: Thomas Geiler, Certified Public Accountant, Certified Tax Consultant, Auren

Source: Common press release Bundesministerium für Wirtschaft und Energie, Die Bundesregierung, 18 September 2020, ueberbrueckungshilfe-unternehmen.de

Image: Adobe Stock, weyo

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