Even under the "lockdown light," many businesses, including restaurants, event organizers, and cultural institutions, and their associated solo self-employed individuals and freelancers, were affected by closures. With the tightening measures now in place, retail is also affected: The federal and state governments are shutting down large parts of the economy until at least January 10, 2021. The government is promising extensive economic aid for those affected.
The already known November and December aid, through which those affected receive reimbursement of 75 percent of their previous year's sales, are not extended to the retail sector. Instead, Bridging Aid III applies. This directly or indirectly benefits businesses affected by closures; they receive non-repayable grants of up to 90 percent of their fixed operating costs. Furthermore, the maximum funding amount for the retail sector has been increased from €200,000 to €500,000.
The amount of economic aid depends on the decline in sales compared to the same month last year. If the decline is less than 30 percent, no support is provided. If sales decline by up to 50 percent, the state covers 40 percent of fixed costs; up to 70 percent, the aid share increases to 60 percent. If sales decline even more, the federal government pays 90 percent.
In addition, the government wants to make it easier to write off unsold goods from the Christmas season for tax purposes. The new measures are still pending approval by the Bundestag's Budget Committee.
Extension of Bayernfonds and Startup Shield Bayern
As with the Federal Government’s bridging aid, the European Commission has now also approved the Bavaria Fund extended until June 30, 2021. The fund can invest directly in companies, with a total of up to €20 billion available for this purpose, and can provide guarantees, for which up to €26 billion is available. The Bayernfonds focuses particularly on medium-sized companies that are important for Bavaria as a business location. It can also support companies that cannot access the federal rescue package.
The German government's startup aid program has also been extended until June 2021. So far, funds from the €2 billion package of measures have been used for financing pledged by December 31, 2020. The startup aid program is divided into two pillars: Under the first pillar, VC-financed startups receive public funding through venture capital funds. Startups that are not financed by venture capital firms and therefore do not have access to Pillar I can apply for €100,000 to €800,000 in the form of convertible loans or equity. The states are responsible for implementing Pillar II. In Bavaria, the program was launched in August under the name “Startup Shield Bavaria” started.
