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Bridging aid III: Significant improvements and new equity subsidy for companies particularly affected by the Corona crisis

Companies that are particularly hard hit by closings in the context of the corona pandemic and for a very long time will receive a new, additional equity grant. In addition, the conditions for bridging aid III will be improved again overall. With these additional measures, the Federal Government is reacting to the continued difficult situation of many companies in the current Corona crisis and is implementing Section 8 of the MPK resolution of March 23, 2021.

Federal Minister of Economics Altmaier: "The Corona crisis continues to hit many companies and employees hard. Some branches of the economy have been closed for over half a year. We are making an additional offer of help for these companies and their employees. With a new equity grant, we are immediately strengthening the substance of these companies and helping them through these difficult times. We are also further improving the conditions for bridging aid III and are helping, among other things, the event and travel industry, which are also continuing to suffer from the crisis. "

Federal Minister of Finance Scholz: “The aid policy is working because we are resolutely taking a stand against the crisis. Economically, Germany got through the pandemic much better than comparable countries. Nevertheless, it is clear that over time, the corona crisis will affect companies. That is why we are now adding a lot more to the aid. It was particularly important to me that we give companies that have been hit particularly long and hard. We must continue to stick together and support one another. This is the only way we can really get started economically again after the pandemic. I am full of confidence that together we can do it! "

Additional information on the new equity grant and the improvements to bridging aid III:

All companies that have suffered a drop in sales of more than 50 percent in at least three months since November 2020 will receive an equity grant. The equity grant is granted in addition to the regular funding of Bridging Aid III.

In addition, the reimbursement of fixed costs for bridging aid III for companies that suffer a drop in sales of more than 70 percent will be increased to up to 100 percent. Up to now, up to 90 percent of the eligible fixed costs have been reimbursed.

The requirements of European state aid law must be complied with for the entire funding of Bridging Aid III (i.e. including the equity grant). Bridging Aid III is based on the Federal Regulation on Small Aid, the Deminimis Ordinance and the Federal Regulation on Fixed Aid. Companies that submit their application on the basis of the federal regulation of fixed cost aid can therefore only receive funding of up to 70 percent of the uncovered fixed costs within the meaning of European state aid law in the period eligible for aid (March 2020 to June 2021). In the case of small and micro-enterprises (companies with fewer than 50 employees and an annual turnover or an annual balance sheet of no more than 10 million euros) that submit their application on the basis of the federal regulation of fixed cost aid, the granted aid may amount to up to 90 percent of the uncovered Fixed costs.

1. New equity grant

The equity grant at a glance:

a)Eligible are companies with a drop in sales of at least 50 percent in at least three months in the period from November 2020 to June 2021.

b) The new equity contribution to strengthen the substance is up to 40 percent of the amount that a company is reimbursed for the eligible fixed costs according to No. 1 to 11 (see FAQ on bridging aid III). The equity grant is staggered and increases the longer companies have suffered a drop in sales of at least 50 percent. It is paid from the third month of the drop in sales and amounts to 25 percent in this month. In the fourth month with a drop in sales of at least 50 percent, the surcharge increases to 35 percent; for five or more months it increases again to 40 percent per month. The following funding rates result for the individual months:

Months with a drop in sales of ≥ 50 percentAmount of the surcharge
1st and 2nd monthNo surcharge
3 month25 percent
4 month35 percent
5th and every subsequent month40 percent

example: A company suffers a 55 percent drop in sales in January, February and March 2021. The company has fixed operating costs of 10,000 euros per month from rental obligations, interest expenses and expenses for electricity, water and heating and applies for bridging aid III. The company receives regular funding from Bridging Aid III in the amount of 6,000 euros each for January, February and March (60 percent of 10,000 euros). For the month of March, it will also receive an equity grant of 1,500 euros (25 percent of 6,000 euros).

c) The new equity grant will in addition to the regular funding of bridging aid III granted.

2. Further improvements to the bridging aid III

• In addition to the new equity contribution, the bridging aid will also be improved overall: The special depreciation options for seasonal goods and perishable goods for retailers will be extended to manufacturers and wholesalers.

• For companies in the event and travel industry, a start-up aid amounting to 20 percent of the wage bill that would have accrued in the corresponding reference month of 2019 will be introduced for each funding month in addition to the general flat rate for personnel costs. The maximum total funding amount for this start-up aid is 2 million euros.

• The event and culture industry can also claim downtime and preparation costs incurred up to 12 months before the start of the planned event date.

• In justified cases of hardship, applicants are given the opportunity to choose alternative comparative periods to determine the decline in sales in 2019.

• Companies sponsored by religious communities and young companies up to the founding date of October 31, 2020 are now eligible to apply. So far, only companies that were founded by April 30, 2020 could submit an application.

• As for self-employed persons with income exclusively from freelance and commercial activities, a right to choose is also created for self-employed persons who are partners in partnerships: They can submit the application for restart assistance either through a third party examining them or as a direct application (the application for restart assistance through examining third parties is therefore only mandatory for corporations).

• Companies and self-employed persons are given a subsequent right to choose between restart aid and bridging aid III at the time of the final settlement. In this way, the most favorable aid in individual cases can be determined retrospectively due to the uncertain course of economic development.

The equity grant and the further improvements will be granted under the existing bridging aid III. This guarantees a quick implementation. The FAQ on Bridging Aid III will be revised and published promptly, in which the procedure for paying out the equity grant will be explained. After the program has been adapted, the application can be submitted via the familiar platform take place. Application processing and payment are the responsibility of the federal states.