Already in 2020 there was initial support for companies by the state. These include, for example, emergency aid to Corona, bridging aid I and II and other country-specific aid. Since the Corona pandemic has so far restricted general economic activity and this applies to various industries until today, there is still the possibility to benefit from government support. In particular, the currently usable bridging aid III for the period from November 2020 to June 2021 should be mentioned. An expansion of this until the end of September 2021 is currently planned. In the following, we explain when an application is eligible for companies, solo self-employed persons or members of the liberal professions and to what extent support is possible.

The funding of the companies affected by the Corona pandemic began first with the Corona emergency aid with a maximum support of EUR 9,000. However, this has been expired for some time (May 2020), as is the case with the bridging aids I (August 2020) and II (December 2020). In addition, with the beginning of the hard lockdown from November 2020, there was also the November aid and the December aid.

Funding is currently possible through the third bridging aid. It is first necessary to check the eligibility for this and to clarify the fulfilment of the requirements. In addition, possible repayments of the Corona emergency aid must be properly processed by the end of 2021.

2.1.1. Eligibility for bridging assistance III

The bridging aid III represents a one-time state aid for all companies that have achieved a maximum turnover of 750 million euros in 2020. However, public companies and those companies that have been in difficulties since the end of 2019 are excluded. This applies to companies that are forced to cease their activities in the short to medium term, insofar as no state aid is provided.

Furthermore, the generally eligible group includes solo self-employed persons and members of the liberal professions in their main occupation. This includes activities that lead to a sufficient economic livelihood. This includes holdings, whereby a sufficient entrepreneurial influence must be guaranteed. Often this is associated with an executive activity.

2.1.2. Requirements of the bridging aid III

First of all, the requirement for using the bridging aid III is that the company with its registered office or a permanent establishment in Germany and a German tax office must be registered.

To determine the amount of funding to be received, sales in the months from November 2020 to June 2021 will be compared with the values from the same months in 2019. Up to 100 % of the fixed costs may be eligible. However, at least one month in this period must achieve a sales decline of at least 30% compared to sales in the same month in 2019.

2.1.3. Conditions

In order to receive the grant, there are different scenarios that are necessary for this. In the event of a fall in turnover of only 30 % to a maximum of 50 %, the applicant will already receive a refund of up to 40 % of the eligible fixed costs. The second scenario would be a 50-70 % fall in turnover. As a result, it would be possible to reimburse fixed costs which are eligible up to 60 %. Any fixed operating costs will be reimbursed if the decrease in sales was higher than 70% compared to the respective month in 2019. It is therefore also clear that the amount of the reported profit is not decisive for a payment of the bridging aid. In addition, it is also important to emphasise that a grant is a non-repayable grant, unlike a loan would be the case.

However, the amount of the subsidy is limited upwards. Because per company can be used a maximum of 1.5 million euros per month. If this company is located in a network, a 3 million euro limit applies to this entire network. In addition, all aid from the Corona Pandemic (Corona emergency aid, bridging aid I-III, November and December aid) has a maximum grant amount of 2 million euros without proof of loss. If losses are proven, this cap is increased to a maximum amount of 10 million euros.

2.1.4. Capital grant

In addition, there is another stage of funding within the bridging assistance III. In addition to the already approved reimbursement of fixed operating costs, a certain percentage of these costs is granted on top. This is especially true for companies that are hard and long affected. In the same period as for the normal bridging aid III, the drop in sales must be at least three months higher than 50% compared to the months in 2019. From the third month onwards, which need not be consecutive, 25% of the fixed cost reimbursement already granted will receive additional support. From the fourth month it is 35 % of the refund and from the 5th. For each month, it is always 40% of the refund already made.

If the company has already received the November aid and the December aid, these months already count into the requirements of the additional equity grant.

The restart help is a support exclusively for solo self-employed without existing fixed costs. This regulation covers solo self-employed persons in the main occupation as well as partnerships and corporations without fixed costs, who employ less than one full-time employee, excluding the shareholder. It should be noted that either the bridging aid III or the restart aid may be used. The application must be submitted by the end of August.

In order to determine eligibility, it is necessary to compare the turnover from 2019 with the turnover in 2021 (reference turnover). With a turnover of 30,000 euros in 2019, the reference turnover is 15,000 euros in 2021. Of these, an advance of up to 50%, i.e. 7,500 euros (maximum advance) can be paid. However, if more than 40% of the reference turnover was generated in the first half of 2021, the advance is reduced. If a solo self-employed person earns 8,000 euros in the first half of 2021, for example, then there is a subsidy of 5,500 euros (15,000 euros * 0.9 = 13,500 euros, 13,500 euros - 8,000 euros = 5,500 euros). Since the turnover plus the subsidy cannot exceed 90 % of the reference turnover. This results in a maximum grant of 7,500 euros for the first six months in 2021 and a maximum grant of 1,250 euros per month.

In addition, for the months from July to September 2021, the grant now changes to a monthly grant of a maximum of 1,500 euros. This results in a possible subsidy of 4,500 euros for these three months.

In addition to the awards and grants already listed, legal and legal costs up to 20,000 euros per month will be supported in the future. If these are used for the restructuring of companies with imminent insolvency.

The concept of fixed costs is particularly important in the context of Corona Bridging Assistance III. In particular, continuous, contractually justified or administratively ordered and non-unilaterally changeable operational fixed costs are included. Thus, so-called permanent debt relationships are justified, which of course should have occurred in this eligibility period. In addition, an important criterion is the existence of the contract before the beginning of 2021. The possible applicable fixed cost categories are presented below.

3.1.1. Rent and lease

Rents and leases are only applicable to land, buildings and premises used for business purposes plus the incidental costs included. In addition, the costs for a home study can be set, if this was already tax deducted in 2019.

In addition, rental costs for operating assets can be included. This also includes costs for the so-called operating leasing. In so-called finance leasing, the financing cost share can also be included.

3.1.2. Interest payable

Furthermore, the fixed cost catalogue includes interest expenses for loans and loans. In particular, deferral interest on suspension of repayment as well as interest on bank loans including current account interest. However, repayments and negative interest are not included.

3.1.3. Depreciation

Fixed costs included also include scheduled depreciation of 50 % for assets of fixed assets. This also includes the intangible assets of fixed assets. However, depreciation on working capital and non-scheduled depreciation are excluded.

3.1.4. Maintenance

Fixed costs also include costs for maintenance, maintenance and storage of fixed assets. However, the cost of producing it cannot be estimated.

3.1.5. Tax advisory costs

The costs for the tax consultant as part of the application for the bridging assistance III are also fully refunded. It is harmless whether the relationship is permanent or only recently.

3.1.6. Insurance, subscriptions and other fixed expenses

In addition, the fixed costs incurred can also include payment for Internet, servers, insurance, garbage, street cleaning, car tax or payments to other external service providers for, for example, payroll or caretaker services.

3.1.7. Licence fees

The included area of royalties includes payments for IT infrastructure or property rights and patents.

3.1.8. Property taxes and electricity, water and heating

The apportionable fixed costs also include any costs incurred during the ongoing operation of a building or a property such as property tax or costs of electricity, water and heating.

3.1.9. Personnel costs

Personnel expenses are charged at a flat rate of 20% of the fixed costs from 3.1.1.-3.1.8., whereby this personnel expense may not be included in short-time worker allowance. In addition, the shareholder-managing director salary is not included. However, expenses for apprentices fall under the heading of personnel expenses.

3.1.10. Structural modernisation or conversion measures for implementing hygiene concepts

The regulation of conversion measures focuses in particular on the implementation of hygiene concepts. For example, the purchase of partition walls or air filter systems is eligible for conveyance. However, it must be documented very precisely to what extent the purchase serves to fulfill or support a hygiene concept. Only costs incurred within its scope are eligible. This measure(s) must have occurred within the period from March 2020 to June 2021. The maximum amount of funding is 20,000 euros per month.

3.1.11. Hygiene measures

In addition to the conversion measures, expenses for rapid tests, protective masks, training, customer counting devices or costs for the temporary relocation of business activities to the outdoors are added.

3.1.12. Digitalisation expenditure

Operating expenses incurred in the context of the digitalization of companies are particularly eligible. It is particularly interesting that a lump sum of up to 20,000 euros can be deducted. This includes expenses for the purchase of hardware or, for example, the creation of an online shop.

3.1.13. Marketing and advertising costs

These costs are to be estimated at the same amount as they were incurred in 2019.

This grants an extended special depreciation for seasonal and perishable goods from manufacturers and wholesalers.

Furthermore, even more specific regulations apply to the pyrotechnics industry, the travel industry as well as to the event and cultural sectors.

The application must be submitted by 31.08.2021 at the latest and thus represents an important deadline for those affected.

Finally, as in the case of the previous grants, a final report must be submitted. There is a deadline until 30.06.2022.

Since the company and the solo self-employed fall into both currently offered support measures, they are free to choose between the restart aid or the bridging aid III at the time of final settlement. Therefore, only the more advantageous is used.

Finally, the bridging aid III is expected to be extended until the end of September. To what extent this affects the application deadline is not yet known. However, the bridging aid continues to provide good protection against the insolvency of small businesses and solo self-employed. In doing so, any entrepreneurs who could possibly be eligible should have this checked by a tax consultant.