COVID-19 & financial support
Germany’s federal government is allocating 156 billion euros to support the victims of the coronavirus. This means new borrowing is inevitable. Yet the parties are in agreement.
Arrangements are being made for direct capital injections to small firms and the self-employed. Those affected in these groups can access sums of between 9000 and 15,000 euros for a period of three months.
IMedium-sized firms will be able to tap into an unlimited loan program made available through the German state-owned development bank, the KfW. Plans have been made for the largest companies to be taken into public ownership if necessary. The government also wants to provide multibillion-euro guarantees and take on debt instruments to ensure businesses that are large and important for jobs in Germany do not land in difficulties during the crisis.
IOnce the crisis has passed, the businesses will then be denationalized again. In addition to this windfall, tax relief is another important part of the rescue package, particularly the deferral of tax prepayments.
IMany businesses are likely to find themselves confronted with a lot of questions and difficult decisions about how best to take advantage these opportunities. We at the commercial law firm MTR Rechtsanwälte note that this situation requires experienced business consultants to come up with a sensible and strategic approach to obtaining and making effective use of the assistance available.
IApplications need to be submitted to Germany’s KfW bank, which is responsible for handling the support program for the federal government.
Experienced lawyers can offer advice.