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Corona aid in partial lockdown: bridging aid II, extraordinary economic aid, grants and loans for founders, entrepreneurs and freelancers | Current overview

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Corona is still the dominant topic: The federal government wants to curb the spread of the corona virus again with a partial lockdown from 2 November. Due to the restrictive measures, many companies have to close completely or partially again and find themselves in financial difficulties. The uncertainty between founders, entrepreneurs and self-employed is great. After all, the federal government has announced new and extensively expanded aid measures for the economy – here companies, the self-employed and freelancers can get an overview of the new Corona emergency aid.

In our overview you can find out what options you now have to secure your existence and close the financial gaps. We will explain the most important things to you about the conditions, requirements and possibilities of applying the extraordinary financial assistance, which is intended to cushion the measures to combat the corona pandemic.

This overview, without guarantee of completeness, of the various options for financial security for freelancers, founders and entrepreneurs in the corona crisis was published on March 19, 2020 and is updated by us at regular intervals. Current status: November 2, 2020.

November lockdown: extraordinary economic aid for lost sales

As part of extraordinary economic aid, the federal government is allocating up to ten billion euros to support all those whose business is temporarily closed due to the partial lockdown.

Who is entitled to the extraordinary financial aid?

Companies, self-employed workers and freelancers, but also associations and social institutions whose activity is prohibited due to government regulations, in particular companies in the catering sector, the culture and events industry, fitness studios and cosmetics can apply , massage studios, tattoo studios, amusement parks and arcades. Support measures are also planned for companies “which are indirectly but comparably affected by the orders”, such as the Federal Ministry of Economics (BMWi) communicate. These include hotels, guest houses, suppliers, laundries, etc.

how much money is there AND does extraordinary economic aid have to be repaid?

In theory, the federal government is quite generous with the new Corona emergency aid. Companies with up to 50 employees will receive 75 percent of turnover from November 2019 (base month) “as a one-time lump sum payment”. This is mainly intended to absorb fixed costs. The fixed costs are calculated as a lump sum in order to be able to help quickly and unbureaucratically. Larger companies pay less: the BMWi determines the specific amounts in accordance with the requirements of the European Union State Aid Law.

For extraordinary economic aid you must observe the following rules:

  • For companies founded after November 2019, October 2020 is the reference month.
  • Individual self-employed persons can choose to use the previous year's average turnover as a basis for calculation.
  • The extraordinary economic aid will be compensated with the state concessions already received for the lockdown period (redundancy fund allowance, bridge subsidy).

Should the extraordinary economic aid for the lockdown light be reimbursed?

The extraordinary economic aid is intended as compensation for lost sales due to the tightening of the Corona measures in November 2020 and must not refunded become. But: the subsidy is fundamental taxable and is taken into account in your tax return or in determining corporate income tax.

Where is extraordinary economic aid requested for November?

On the Bridge aid platform A simplified application should be readily available. The federal government expects it will take some time before all the details are clarified and is therefore looking into allowing advance payments, according to its statements.

More Corona Aid November: Easier and better Bridging Aid II

The bridging aid introduced in March, i.e. grants for fixed operating costs, will be extended. The bridging subsidy II is valid for the months from September to December 2020 and can be requested until 31 December 2020 at the competent Federal state be required.

This must be observed with Bridging Aid II:

  • Only accountants, auditors, sworn auditors and lawyers can apply.
  • The grant amount (maximum 90% of fixed costs) is staggered according to expected sales slumps.
  • The maximum loan amount is 50,000 euros per month or 200,000 euros for four months.
  • The ceiling (9,000 euros for companies with up to five employees and 15,000 euros for up to ten employees) does not apply.
  • The lump sum for staff costs has been increased to 20% of the eligible fixed costs.

In anticipation of further significant restrictions in the commercial activity of some sectors, the transitional aid for the period from January 2021 to June 2021 is to be extended (transitional aid III).

Partial block November 2020: KfW quick loan simplified

The KfW quick loan is now also available for companies (founded before 2 January 2019) with fewer than ten employees. The maximum loan amount is EUR 300,000, depending on sales in 2019. The federal government continues to bear the entire risk and relieves the domestic banks of liability. Details are yet to be worked out (as of November 2, 2020). The information is available directly from KfW.

In the corona crisis: the startup ecosystem stands together

Important information and best practices for startups are collected centrally by the startup association. This collection of sources “The Corona Starter Manual” is continuously updated and contains information on topics such as short-time work, liquidity and the measures that startups can currently adopt. IL startup association expressly emphasizes this offers of assistance in progress startups that are not members of the association are also available.

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For freelancers, small businesses and the self-employed: 50 billion euros in emergency aid from the federal government

On Monday, March 23, the federal government decided on sweeping measures to provide financial support to small businesses, the self-employed and freelancers. EUR 50 billion is available for emergency aid. are provided

  • up to 9,000 euros as a one-off payment for three months for companies with up to five employees
  • up to 15,000 euros as a one-off payment for three months for companies with up to 10 employees.

The package of measures was approved by the Bundestag on Wednesday 25 March and by the Bundesrat on Friday 27 March. You can find the most important dates and key points of the “Corona emergency aid for micro-enterprises and the self-employed”. Here (PDF).

What can Corona subsidies actually be used for?

Useful guarantee bank portal

German guarantee banks have a portal developed to provide quick and easy support to companies affected by the coronavirus crisis. In just a few steps, interested persons can submit a non-binding application to the responsible guarantee bank.

The guarantee banks also point out that the service desk can be reached from Monday to Friday from 9.00 to 18.00 and on Saturday and Sunday from 10.00 to 18.00: both by telephone (0800 0008327) and by e-mail (support@finanzierungsportal.ermoeglicher.de).

Discounts also for young entrepreneurs who started up after 31 December 2019

The principle that only founders who started before December 31, 2019 receive funding is being adjusted in the first federal states. Then he can enter Thuringia Start-ups that dared to take the step into self-employment between 1 January and 15 February 2020 also receive grants, such as the Erfurt Chamber of Commerce.

In North Rhine-Westphalia A regulation is being worked on “which should allow in exceptional cases to also support founders who have started their own business after that date (December 31, 2019, ed.)”. assessment.

Overview of Corona aid from the federal and state governments

Startups receive help from the federal government during the corona crisis, but the federal states have also launched their own aid programs. It is not always easy for founders to get the overview: What special features must be observed in their own state? Which KfW loans are suitable for startups? What is it about country guarantees? And who is eligible for a grant from the Corona emergency aid program?

The overview “Startup country: Corona aid” of the digital association Bitkom first gives an overview of federal aid programs such as Corona emergency aid, KfW loans and the Economic Stabilization Fund and explains who is entitled to this support and how it is applied for. Furthermore, there are references to tax law support measures such as the reduction of tax advances or the deferral of tax burdens.

In addition, each federal state has its own overview of which aid measures have been approved by state parliaments, which startups can benefit from them and where applications can be submitted. For further questions, there is a contact point in each federal state with contact details.

This is also recommended Corona information sheet (PDF) for startups and SMEs from the consultancy PricewaterhouseCoopers.

Suspended bankruptcy law / adequate tenancy law

In the bankruptcy law the obligation to file for insolvency for the companies concerned will be suspended. For private individuals, the effects of the Covid 19 pandemic are appropriately taken into account in the event of insolvency at the time of repayment of the residual debt. (Source: bundesregierung.de)

For locations land or premises, the landlord's right of withdrawal is limited. This means that, for example, the photographer cannot be fired if he is in arrears of two months' rent. (Source: bundesregierung.de)

Bavaria has the best programme: Corona emergency aid for SMEs and freelancers

“With this total package, we are demonstrating our determination to save as many companies as possible. The aim is to save corporate liquidity, the basic substance of our economy, and as many jobs as possible from the crisis,” says Bavarian Economy Minister Hubert Aiwanger, who immediately followed up his words with deeds and put up a large “protective shield”. In addition to increasing the guarantee framework for LfA Förderbank Bayern and setting up a “Bayernfonds” for small businesses, the self-employed and freelancers, the “Corona first aid” Interesting.

The fast-track, unbureaucratic program supports companies and self-employed entrepreneurs who have entered a life-threatening economic crisis and liquidity bottlenecks due to the corona crisis. Between 5,000 and 30,000 euros are awarded as a scholarship which does not have to be reimbursed.

Emergency aid programs I and II: protective shield for companies and the jobs of Berlin

The Berlin Senate has put together two comprehensive emergency aid packages for small businesses, freelancers and the self-employed. Up to €600 million will be made available. In the Emergency Aid Program I the liquidity fund of the Berlin-Brandenburg investment bank will be open to all small and medium-sized enterprises with up to 250 employees. Companies affected by the coronavirus pandemic must grant interest-free loans of up to 500,000 euros quickly and unbureaucratically.

. Emergency Aid II is intended for small and micro-enterprises with up to five employees, as well as for freelancers and self-employed workers who can apply for a maximum grant of 5,000 euros – but on the basis of this Information from the State Chancellery several times.

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https://twitter.com/RamonaPop/status/1240711777865871360

Hamburger Corona Emergency Aid (HCS)

The Hamburg Senate also appeals emergency aid program with real scholarships for freelancers and small and medium-sized enterprises. In the event of liquidity bottlenecks threatening the existence of the company, between 2,500 euros (individual self-employment) and 25,000 euros (companies with up to 250 employees) should be paid. The program is expected to start in week 13 (March 23-29).

https://twitter.com/Senat_Hamburg/status/1240678512161366019

2000 euros of emergency aid for freelance artists in North Rhine-Westphalia

THE state government of North Rhine-Westphalia recognizes freelance artists in economic difficulties a one-off fee of 2,000 euros. According to the state government, the grant does not have to be repaid. The application is one DIN A4 page long.

Saxony-Anhalt: 400 euros/month emergency aid for artists and writers

The state of Saxony-Anhalt grants a grant of 400 euros per month to artists working in the field of music, performing arts or fine arts, as well as writers. The fellowship is currently available for up to two months. Information on how to apply can be found at Office of the state administration of Saxony-Anhalt.

Federal government package of measures as a protective shield for employees and companies in the corona crisis

The federal government has put together an extensive package for businesses and employees to offer support and help. THE The package is based on four pillarsthat offer financial relief:

  • More flexible conditions for short-time work: For entrepreneurs with employees, there is tremendous relief in the form of short-time work. So that companies don't have to fire their employees directly, there are now simpler requirements for short-time work. This makes it possible to bridge this difficult time with less work during the corona pandemic. This means employees can work less and not lose their jobs.
  • Fewer liquidity problems thanks to tax relief: For entrepreneurs and freelancers, current payments to the tax authorities also obviously represent a large expense item. There's good news for you here, too, because tax offices offer you three options for financial relief. On the one hand, tax deferrals are possible, so tax payments can be postponed. You can also reduce your upfront tax payments. And thirdly, the tax offices waive late payment penalties and enforcement measures.
  • The Billion Dollar Business Shield: The protective shield includes easier access to funding and funding programs than liquidity support. In concrete terms, this means simplified entry requirements for loans and concessions. We will describe them to you in more detail below.
  • Greater cohesion in Europe: In this way, a common line must be followed by the European countries and the liquidity of the banks must be guaranteed by the European Central Bank. Furthermore, a “Corona Response Initiative” with around 25 billion euros is under discussion in the European Commission.

Application for short-time work

If you have employees, short-time work is a good way to secure jobs and still reduce your operating expenses in the form of wage costs. There are now simpler entry requirements for this short term allowance. You can request it. This is now possible if all other options such as home office and vacation have already been used and 10% of employees are already affected by lost work (previously it was 30%). This measure also provides for the full reimbursement of social security contributions by the Federal Employment Agency. For this you must Report short-time work to the employment agency and apply.

Basic security for self-employed and freelancers

Are you currently experiencing bankruptcies, but you can still fulfill orders and earn money on them, but isn't that enough to live on? Then you can apply for basic security as a self-employed person at the employment agency, also known as unemployment benefits II or Hartz IV. With this you can protect your existence and bridge these difficult times. The amount of this basic security is calculated individually and depends on many factors such as income, fixed costs, payments and more. Your contact person at the employment agency will help you with the application.

Unemployment insurance for freelancers and the self-employed

If you took out unemployment insurance from the Employment Agency during the first three months of your self-employment, you are now eligible for this insurance. With this insurance you can now get unemployment benefit, but it is important that you are not authorized to work, because in that case you will be registered as unemployed. Whether there are orders, you can only do part-time work, but you cannot work more.

Tax relief from the tax authorities

As already briefly mentioned, the tax offices are also granting relief and allowing tax deferrals. This doesn't remove any costs, but it does reduce expenses for you. On the one hand, it is possible to defer income, corporate and sales tax and thus defer it. On 10 June 2020, on the other hand, the advance declarations and IRPEF and IRPEF advances for the second quarter expire. Here you can minimize these tax payments.

There is a corresponding one for this Application, with which you can adjust your annual income and thus include lost sales. As a further measure, until 31 December 2020, the tax offices will refrain from enforcement and late payment penalties, which will also make things easier for you. You can obtain more detailed information from the responsible tax office about which regulations can be implemented for you.

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Government support for freelancers and self-employed in quarantine

There is relief for you if you are already in quarantine and therefore unable to practice your profession. In this case, this applies to you Law on the prevention and control of infectious diseases in humans, because this way you are protected in case of an emergency. If you are in quarantine, you will receive compensation from the state for lost income. You will then receive a monthly payment based on the previous year's annual income.

Loans and grants for entrepreneurs in the corona crisis

Of course, if you have financial worries, you also have the option of taking advantage of aid loans, which are currently being granted on preferential and preferential terms in view of the coronavirus. For this you are next to the Financing from the KfW bank also offers from guarantee banks and the state development banks available.

These credits are at your disposal

  • The loan to the KfW entrepreneur: This loan offers a remedy for small commercial businesses with up to 50 employees and freelancers that have been in existence for more than five years.
  • The ERP Startup Loan: With a turnover of up to 500 million euros and up to five years on the market, freelancers and younger medium-sized companies can use this loan to protect themselves in times of Corona.
  • The KfW loan for growth: A turnover of five billion euros is the turnover limit for this loan, which provides financial support to companies in the field of innovation and digitalisation.

Corona financial aid listed by the federal state

General information on financing

In general, if you have liquidity problems, you can contact the Federal Ministry of the Economy for more information and advice. To do this, you can call the Federal Ministry of Economic Affairs' funding hotline (030) 18615 8000.

Valuable links for startups and the self-employed in times of the corona crisis

Even if we try to find all programs and measures that are important to you and list them here, the development is certainly faster than our editorial staff at the moment. So we appreciate it if you let us know about your new support – be it national, country-specific or just specialized in certain sectors – in the comments below the text. We try to check them regularly and incorporate them into the article.

This overview, without guarantee of completeness, of the various financial security options for freelancers, founders and entrepreneurs in the Corona crisis is updated by us at regular intervals. Current status is: November 2, 2020.

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