The German government has extended bridging aid for small and medium-sized enterprises through December 2020. As part of the extended program, higher subsidy amounts will be available for companies experiencing significant losses due to the COVID-19 pandemic.
Following Phase 1 (June to August 2020), Phase 2 will now apply to the period September to December 2020. Applications for Phase 2 were expected to be possible starting in October. Access conditions have also been expanded. Companies can apply if they demonstrate:
- a revenue decline of at least 50% in two consecutive months between April and August 2020 compared with the same months in the previous year, or
- an average revenue decline of at least 30% between April and August 2020 compared with the same period in the previous year.
Increased subsidy rates:
| Revenue decline (funding month vs. prior-year month) |
Reimbursement of fixed costs |
|
More than 30% (previously 40–50%) |
40% |
| 50% to 70% |
60% (previously 50%) |
| More than 70% | 90% (previously 80%) |
Eligible fixed costs include, among others, rent and leases, financing costs, apprentice expenses, property taxes, and other fixed expenditures. Calculations are made separately for each month. If the revenue decline in a funding month falls below the minimum threshold, aid is not granted for that month.
Eligible costs for personnel not on short-time work have also been increased to 20%.
The maximum funding amount in Phase 2 is €50,000 per month.
The previous caps for companies with up to 5 employees (€9,000) and up to 10 employees (€15,000) have been abolished for Phase 2.
Applications for bridging aid must still be submitted by tax advisors, auditors, lawyers, or certified accountants. They verify revenue declines and fixed costs and submit the applications on behalf of businesses.
Implementation and payment of the bridging aid are handled by the respective federal states.
If you have any questions, we will be happy to assist you.
Thorsten Manewald, tyskrevision
info@tyskrevision.com