A two billion euro package of measures for start-ups
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A two billion euro package of measures for start-ups

The two-billion-euro package of measures for start-ups, which was announced at the beginning of April, is now complete. Hereinafter you will find all the information published so far.

Economic aid measures that have been decided during the Corona crisis are not effective for many start-ups. After all, companies in the growth or research phase usually do not generate any sales yet. However, sales are an essential precondition for the use of classic credit instruments.

The German government recognised this problem and announced a package of measures for start-ups in the crisis at the beginning of April. Now the support package is finally in place.

The two-billion-euro package of measures for start-ups is set up

Together with the German Reconstruction Loan Corporation (KfW) and KfW Capital, a package of measures has been developed by the Federal Ministries of Economics and Energy as well as Finance.

It is designed to save jobs and to strengthen Germany as a location of innovation.

The package of measures for start-ups includes the following:

The federal government provides two billion euros. The shield for start-ups consists of two pillars, which differ from each other in their respective access.

Pillar 1: Corona Matching Programme

The Corona Matching Programme provides additional public funding to start-ups if they are or will be financed by venture capital funds.

However, this is dependent on a new round of financing to help the start-ups raise further liquid funds. In this case, for example, 30% of the new financing round can be funded by venture funds. An additional 70 % is made available through the Matching Fund in form of convertible loans.

The Corona Matching Fund uses existing cooperations with institutional partners such as KfW Capital or the European Investment Fund. Therefore, applications must be made directly to these institutions.

Pillar 2: Federal State Aid

For start-ups that are not financed by venture capitalists (especially early-stage start-ups), the protective shield for Start-ups provides further options to secure financing.

According to the Government, these should be provided by the respective funding agencies of the federal states. As part of the newly adopted measures, the federal states will be provided with a global loan to increase existing funding programmes or to create new ones.

Who is addressed by the protective shield for start-ups?

The package of measures based on the two pillars described above is directed at start-ups and small to medium-sized enterprises with a sustainable business model.

At which point may funds from the Start-up protective shield be applied for?

So far, no schedule has been announced by the authorities. Currently, companies cannot apply for the aid yet.

There is also no information available so far on the exact functioning of the mechanisms of the Start-up protective shield. We will keep you informed at this point.

Our assessment

Finally, the measures for start-ups announced on 1 April 2020 are in place. The measures close a gap in the existing support measures.

The extent to which these measures will actually help, can only be evaluated once the respective implementing provisions have been drawn up. When and in what form these will be available cannot be predicted yet. Hopefully, clarity will soon be achieved in this matter.

We will inform you as soon as we have more information. If you have any questions, please do not hesitate to contact us.

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Lars Rinkewitz
Lars Rinkewitz
Tel.: +49 211-90 86 70

Steuerberaterin in Düsseldorf, Büsra Karadag
Büsra Karadag
Tel.: +49 211-90 86 70