"Our temporary support will help companies that have been particularly hard hit, especially medium-sized companies, thus getting them fit again to drive the economy forward," said Federal Economics Affairs Minister Peter Altmaier, who was presenting the salient points of the new federal programme in Berlin along with Federal Finance Minister Olaf Scholz.
On Friday, the Cabinet agreed on the cornerstones of a federal programme entitled "Temporary support for small and medium businesses that have had to shut down to a significant extent or in full as a result of the coronavirus crisis". Here are the answers to some frequently asked questions:
Who can apply?
Small and medium businesses and organisations from every sector of the economy, provided they are not eligible from support from the Economic Stabilisation Fund, one-person self-employed outfits, full-time freelancers in liberal professions, non-profit businesses and organisations that are permanently active on the market.
What preconditions must be met before an application can be lodged?
Business operations must have had to shut down completely or to a significant extent as a result of the coronavirus pandemic.
How high is the support?
The temporary support will reimburse:
- 80 per cent of fixed costs, where turnover has dropped by more than 70 per cent
- 50 per cent where turnover has dropped by between 50 and 70 per cent
- 40 per cent where turnover has dropped by at least 40 and less than 50 per cent
- The maximum support is 150,000 euros for three months.
- For companies with up to 5 employees, the maximum sum that can be reimbursed is 9,000 euros for three months.
- For companies with up to 10 employees, the maximum sum that can be reimbursed is 15,000 euros for 3 months.
- In exceptional and justified cases – small businesses with extremely high fixed costs – support may be granted in excess of these ceilings.
What are the procedures for application and settlement?
Application is a two-stage online procedure, that must be handled by your accountant/auditor. The individual federal states are responsible for implementing the system,.
- Stage 1: Credible evidence is submitted that the applicant meets the preconditions, along with a statement of the fixed costs eligible for reimbursement.
- Stage 2: Subsequent presentation of evidence. After the end of the programme, forecast turnover will be compared with actual turnover. Where the actual turnover deviates from forecasts, adjustments must be made. Where support was too high, it must be reimbursed. Where support was too low it will be subsequently topped up.
What is the difference between this and the emergency assistance already in place?
The support available under the new programme is significantly higher than the emergency assistance. Non-profit companies and organisations that are permanently active on the market are also eligible to apply. From June to August, depending on the loss of turnover, up to 150,000 euros operational fixed costs can be reimbursed. The other side of the coin is that the requirements for applications and disbursement are more stringent. An accountant or auditor must confirm the loss of turnover and the operational fixed costs.
What is the maximum volume of the new federal programme?
The maximum volume available for temporary support is 25 billion euros.
What about the consolidation requirement?
Associated companies, or companies that are directly or indirectly under the influence of the same person or the same company can apply for a maximum sum of 150,000 euros for three months in assistance.
This does not apply to public-benefit bodies offering overnight accommodation such as youth hostels, Schullandheime (hostels offering accommodation specifically for school classes on school field trips), international youth exchange bodes, and facilities for people with disabilities.