The Corona aid program of the German Federal Government
On March 27, 2020, the Federal Council approved the government's relief package for the corona crisis. It will allow the federal government to take on new debt of EUR 156 billion to support the health system, businesses, and employees.
Corona aid for larger companies
Several hundred billion euros will be made available via the “Economic Stabilization Fund” (Wirtschaftsstabilisierungsfonds, WSF), including State guarantees for liabilities of up to EUR 400 billion. The WSF is also to provide EUR 100 billion in loans for companies to development bank Kreditanstalt für Wiederaufbau (KfW). An additional amount of EUR 100 billion is earmarked for direct investments in companies.
The WSF serves primarily to stabilize companies in the real economy (i.e., not companies in the financial sector) by overcoming liquidity bottlenecks and is aimed at businesses that have met at least two of the following three criteria in the last fiscal year prior to January 1, 2020:
- a balance sheet total of more than EUR 43 million,
- sales in excess of EUR 50 million, and
- more than 249 employees on an annual average.
Corona aid for self-employed individuals, sole proprietors, small businesses
Emergency aid from the federal government
The federal government is making up to EUR 50 billion available for small businesses and self-employed individuals. An amount of at least EUR 10 billion is to be used as direct transfer payments, which do not have to be repaid, for those in need. The remaining amount is to be granted as loans. All applications are to be approved first, while a means test will only be carried out later.
- Amount of federal subsidy:
- Companies, self-employed, and freelance professionals with up to 5 employees will receive a one-off payment of up to EUR 9,000 for 3 months.
- Companies, self-employed, and freelance professionals with up to 10 employees will receive a one-off payment of up to EUR 15,000 for 3 months.
- Repayment: The subsidy does not have to be repaid.
- Application: Not yet possible! Details will follow here.
Emergency aid from the countries
1. Emergency aid Corona
- Eligible applicants and requirements:
- Applications may be submitted by commercial and social enterprises, by self-employed individuals, and by members of the independent professions, including artists, with up to 50 employees (full-time equivalents) who are headquartered in Baden-Württemberg.
- Self-employed individuals and micro-enterprises with less than five employees are only entitled to apply if their self-employment provides the main income or at least one third of a household’s net income.
- Liquidity bottlenecks or revenue shortfalls that occurred prior to March 11, 2020 are not eligible.
- Amount of emergency aid in Baden-Württemberg:
- EUR 9,000 for 3 months for eligible applicants with up to 5 employees
- EUR 15,000 for 3 months for eligible applicants with up to 10 employees
- EUR 30,000 for 3 months for eligible applicants with up to 50 employees
- Repayment: These amounts do not have to be repaid.
- Application: Applications may be made electronically from March 25, 2020 (Wednesday evening). Applications must be submitted to the relevant chambers (Chamber of Commerce and Industry, Chamber of Trade).
2. Hardship fund
- Eligible applicants: self-employed and medium-sized enterprises with up to 50 employees
- Amount of emergency aid in Baden-Württemberg: up to EUR 15,000
- Application: The hardship fund is in the planning state. Applications should be possible from the end of week 13.
State of Bavaria
Emergency aid for self-employed and freelance professionals in Bavaria
- Eligible applicants and requirements
- The subsidy is intended for commercial companies and self-employed members of the independent professions (up to 250 employees) who have a place of business or work in Bavaria.
- The prerequisite is an acute liquidity bottleneck, meaning that there is no (sufficient) liquidity to pay current obligations, for example.
- Available liquid private assets must be used prior to requesting emergency aid.
- Amount of emergency aid in Bavaria:
- Up to 5 employees: EUR 5,000
- Up to 10 employees: EUR 7,500
- Up to 50 employees: EUR 15,000
- Up to 250 employees: EUR 30,000
- Repayment of the Corona emergency aid: The emergency aid in Bavaria does not have to be repaid.
- Complete, print out, sign, and send the funding application by email or postal mail to the relevant authority. The applications will be processed quickly and payment will be made promptly to the applicant's account. The competent application office can be found on the website of the Bavarian State Ministry of Economic Affairs, Regional Development, and Energy.
1. Emergency aid I for small and medium-sized enterprises with up to 250 employees
- Measure: Interest-free bridging loans of up to EUR 500,000 with a term of up to 2 years, in exceptional cases up to EUR 2.5 million (interest rate 4.0% annually)
- Application: The application must be filed with Investitionsbank Berlin.
2. Emergency Aid II for small enterprises, self-employed individuals, and freelance professionals
- Eligible applicants: small and micro-enterprises with a maximum of 5 employees, freelance professionals, and self-employed individuals, especially in the fields of health, equality, retail and services, youth and education, creative industries, culture, social affairs, sports, and tourism.
- Amount of emergency aid in Berlin: Not yet determined. A total of EUR 100 million has been made available for this purpose for the current year.
- Repayment of Corona emergency aid: The emergency aid in Berlin will probably not have to be repaid.
- Application: For Emergency Aid II, no application is possible yet. As soon as information is available, you will find it here.
Emergency aid program for small and medium-sized enterprises and freelance professionals
- Eligible applicants: commercial enterprises and self-employed members of the independent professions (up to 100 employees) with a place of business or work in the state of Brandenburg.
- Amount of emergency aid in Brandenburg:
- Up to 2 employees up to EUR 5,000
- Up to 5 employees up to EUR 10,000
- Up to 15 employees up to EUR 15,000
- Up to 50 employees up to EUR 30,000
- Up to 100 employees up to EUR 60,000
- Repayment: The emergency aid in Brandenburg does not have to be repaid.
- Application: The emergency aid will be transferred by Investment Bank of the State of Brandenburg (ILB) to the beneficiary's account shortly after receipt of the complete set of application documents. Applications are possible from mid-week 13 (March 25, 2020).
Free Hanseatic City of Bremen
Corona Emergency Aid Program
- Measure: Liquidity subsidies to cover running costs.
- Eligible applicants and requirements: Micro-enterprises with less than 10 employees and less than EUR 2 million annual sales, self-employed individuals, and freelance professionals in Bremen and Bremerhaven.
- Amount of emergency aid in Bremen: Up to EUR 5,000, depending on the amount of the liquidity bottleneck shown. In justified individual cases, up to a maximum of EUR 20,000 with relevant proof.
- Repayment: The emergency aid in Bremen does not have to be repaid. Grants serve as liquidity support until other claims are assessed and realized. In the event of overcompensation (compensation and insurance payments, other support measures, e.g., from the federal government), the subsidies received must be repaid proportionately.
- Application: Complete the application form, print it out, sign it, and submit it by email or by postal mail (see application form for address).
Free and Hanseatic City of Hamburg
Hamburg Corona Emergency Aid (HCS)
- Eligible applicants and requirements: Small and medium-sized enterprises and freelance professionals who, as addressees of the municipal corona general decrees, are directly affected by an imbalance or liquidity bottlenecks that threaten their existence.
- Amount of emergency aid in Hamburg:
- EUR 2,500 (self-employed individuals)
- EUR 5,000 (less than 10 employees)
- EUR 10,000 (10 to 50 employees)
- EUR 25,000 (51 to 250 employees)
- Repayment: The subsidy from the City State of Hamburg does not have to be repaid.
- Application for emergency aid: The application, approval, and payout procedure will start in the middle of week 13 and will be updated as soon as there are specific procedures and applications available.
- Additional information on the Hamburg emergency aid program for those affected by the corona crisis can be found here.
Corona emergency aid for micro-enterprises and self-employed individuals
- Measure: Hesse is increasing the federal aid program.
- Amount of emergency aid in Hesse:
- 0 to 5 employees: EUR 10,000
- 6 to 10 employees: EUR 20,000
- 11 to 50 employees: EUR 30,000
- Repayment: The emergency aid provided by the State of Hesse does not have to be repaid.
- Application: Hesse's emergency aid builds on the emergency aid scheme of the federal government, so applications will only be possible after federal aid has been approved. Applications may be filed with WIBank.
Liquidity support for freelance professionals and SMEs
- Measure: Liquidity support for micro-enterprises and freelance professionals via repayable subsidies of up to EUR 20,000
- Amount of the liquidity support:
- Interest-free loan up to EUR 20,000, term 5 years
- Loans of up to EUR 200,000, interest-free in the 1st year, thereafter 3.69% annually, 1st year redemption-free
- Residual debt discharge after 36 months will be possible if the existence of the company is threatened.
- Application: The funds are to be granted in a simplified procedure by Gesellschaft für Arbeitsmarkt und Strukturentwicklung (GSA). It is already possible to register for the application. Application forms are expected to be available from April 1, 2020.
Grants for self-employed individuals, micro-enterprises, and small enterprises
- Eligible applicants: The target group is companies, freelance professionals, and self-employed individuals (including artists and creative artists). Start-ups that are younger than 5 years will also be eligible for the subsidy.
- Amount of emergency aid in Lower Saxony:
- Up to 5 employees: EUR 3,000
- Up to 10 employees: EUR 5,000
- Up to 30 employees: EUR 10,000
- Up to 49 employees: EUR 20,000
- Application: From March 25, 2020 3:00 pm on the NBank customer portal.
- Emergency aid from the federal government may be applied for in addition to the state subsidy if a corresponding need can be justified. The use of state and federal funds may, however, not lead to over-funding!
1. Emergency aid for small enterprises
- Measure: The emergency aid program for SMEs from all sectors of the economy as well as for self-employed individuals and freelance professionals of the State of North Rhine-Westphalia builds on the aid program of the federal government. NRW is topping up the program and also paying a subsidy to companies with 10 to 50 employees.
- Amount of emergency aid in North Rhine-Westphalia:
- Up to 5 employees: EUR 9,000 (federal contribution)
- Up to 10 employees: EUR 15,000 (federal contribution)
- Up to 50 employees: EUR 25,000 (national performance)
- Repayment: There is no requirement to repay the emergency aid.
- Application: Applications will be possible from week 13.
2. Emergency aid program for freelance artists
- Measure: An emergency aid program of EUR 5 million was set up for artists in NRW affected by the corona crisis. Independent artists who are struggling with order slumps and liquidity bottlenecks, for example, are eligible to apply.
- Amount of the emergency aid in NRW: Artists will receive a one-off payment of up to EUR 2,000 to secure their livelihood.
- Repayment: This subsidy from the North Rhine-Westphalian government does not have to be repaid.
- Application for emergency aid for artists: The application is made to the respective district government, where the application forms are available for download.
- Amount of emergency aid in Rhineland-Palatinate:
- Up to 5 employees: EUR 9,000 federal subsidy + EUR 10,000 emergency loan if required (max. EUR 19,000)
- Up to 10 employees: EUR 15,000 federal subsidy + EUR 10,000 emergency loan if required (max. EUR 25,000)
- Up to 30 employees: EUR 30,000 emergency loan plus state subsidy of 30% of the loan amount
- The emergency loans have a term of 6 years and are interest-free and redemption-free until the end of 2021.
- Repayment: The federal subsidy does not have to be repaid, the emergency loan does have to be repaid.
- Application: Applications are not yet possible. As soon as there is any additional information available, you will find it here.
Emergency aid for small businesses, artists, and creative artists
- Eligible applicants and requirements:
- Small and medium-sized enterprises with up to 10 employees subject to social security contributions and maximum sales of EUR 700,000 or EUR 350,000 balance sheet total per year.
- Also for freelance artists and creative artists.
- Amount of emergency aid for artists in Saarland: EUR 3,000 to EUR 10,000
- Repayment: It is not expected that the subsidy will have to be repaid.
- Application: The program is to be officially adopted by the Council of Ministers on March 24, 2020. Applications will be possible afterwards.
State of Saxony
Saxony's Ministry of Economic Affairs refers to the emergency aid of the federal government. Interest-free loans between EUR 5,000 and EUR 50,000 may be applied for via Saxony Reconstruction Bank.
Saxony-Anhalt has announced an emergency program for self-employed individuals and micro-entrepreneurs, which is based on the announced federal aid and is to be tailored to the economic structure of Saxony-Anhalt. Specific information is not yet available.
Corona emergency aid for artists
- Eligible applicants and requirements:
- Artists creating, performing, or teaching their artistic activity in the fields of music, performing or visual arts, and writing.
- The artistic or literary activity is exercised on a professional basis and not just temporarily.
- Applicants must reside be in Saxony-Anhalt.
- Amount of emergency aid for artists in Saxony-Anhalt: EUR 400 per month for an initial maximum of 2 months
- Repayment of the artist emergency aid: The monthly subsidy does not have to be repaid.
- Application: Complete the application, print it out, sign it, and send it by email or postal mail to the Saxony-Anhalt State Administration Office.
- Measure: The state government of Schleswig-Holstein provides EUR 500 million in emergency aid for companies whose existence is threatened by the corona crisis. EUR 100 million thereof will be paid out as direct subsidies.
- Eligible applicants and requirements: Micro-entrepreneurs, small traders, and self-employed individuals in an economic situation that is threatening their existence, if they are not entitled to federal aid in the amount of the emergency aid.
- Amount of the emergency aid:
- EUR 2,500 for self-employed individuals
- EUR 5,000 for companies with up to 5 employees
- EUR 10,000 for up to 10 employees
- Repayment: The emergency aid does not have to be repaid.
- Application: Applications are not yet possible. As soon as there is additional information available, you will find it here.
Corona emergency aid
- Eligible applicants:
- Commercial enterprises, including sole proprietorships
- Enterprises of industry 86.9 (healthcare services, if they do not have a business registration)
- Business-related independent professions and the creative industries
- Amount of emergency aid: From EUR 5,000 up to EUR 30,000 (for companies with 1 (including owner) up to 50 employees)
- Repayment: The Thuringia emergency aid does not have to be repaid.
- Application: The application for emergency aid is now available at Thüringer Aufbaubank (TAB).
Measures taken to date
Even before the package, which has now been approved by the Federal Council, there were a number of measures available to support companies in the corona crisis, in particular
- More flexible short-time work allowance: The hurdles for short-time work allowance have been lowered. Please refer to our “Answers to employment law questions”
- Tax liquidity assistance for companies: Companies may defer taxes and reduce or suspend advance payments for the current year. See “Tax and liquidity assistance for entrepreneurs”
- Loans and guarantees of the federal government and the German states: See “Tax and liquidity assistance for entrepreneurs”
- Strengthening European cohesion: The federal government intends to promote a coordinated approach at EU level. See “Tax and liquidity support for entrepreneurs”
Status: March 27, 2020
Home office and taxes - what do companies with cross-border commuters have to consider? - As one of the consequences of the outbreak of the COVID-19 pandemic, many…
“Acquihires” – Can acquihires provide a way out of the crisis? - Acquihires are a trend from the US start-up and venture capital scene, which…
Reduction of value-added tax – what do you need to know? - As part of the economic stimulus package, the German government has decided,…