Bridging aid: What you can already prepare
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Bridging aid: What you can already prepare

We have already informed you about the main features of the new bridging aid. How exactly the regulations will be applied and how the authorities will proceed has not yet been decided in principle. The Bundestag and Bundesrat still have to decide on the legal basis and some details may still change. You are also not yet able to submit any applications. We know that there will be a two-stage application procedure. Our experience with emergency aid suggests that you can start preparing your application now. Then you will be prepared when the responsible persons activate the application portal and you will be one of the first applicants.

For the bridging loan, you must document your sales slump

The German government has presented a key issues paper on bridging aid. This paper sets out an essential requirement that must be met before an application can be made.

  • In the months of April and May 2020 there must be a slump in sales of at least 60 percent compared to the same months of the previous year.
  • For the months June, July and August 2020, there must be a slump in sales of at least 40 percent compared to the same months of the previous year.

You should check this now

Does your tax consultant have all the relevant data? Please check whether you have submitted all details, all documents and data relevant for the months April and May 2020. The key issues paper of the Federal Government is clear. If you cannot prove a 60 percent slump in sales in the months of April and May 2020 compared to the previous year (April and May 2019), you may not apply for bridging aid.

You need to estimate your sales for June, July and August 2020

For June, July and August 2020 you must first estimate your sales. To apply, you will need to submit individual sales plans broken down by month. Your sales plans should be as plausible as possible and verifiable based on existing data. What sales can you realistically generate in the respective months? This is the central question that you as an entrepreneur must answer yourself. We would be happy to help you as a sparring partner with the necessary estimation.

These fixed costs are eligible – check your supporting documents

The bridging aid subsidises fixed business costs for contracts concluded before 1 March 2020. Finally, the key issues paper mentions the following costs:

  • Rents and leases
  • Interest expenses on loans and credits
  • Financing proportion of costs of leasing instalments
  • Expenditure on necessary maintenance
  • Maintenance or storage of fixed assets and leased assets, including IT
  • Expenditure on electricity, water, heating, cleaning and hygiene
  • Operating license fees
  • Insurance, subscriptions and other fixed expenses
  • Eligible are commissions refunded by travel agents to tour operators for cancellations due to Corona.

Please also check here that you have submitted all documents relating to eligible fixed costs to your tax advisor. If not, please compile these costs and forward the relevant documents to your tax consultant.

Bridging aid: Our assessment

Please contact your tax advisor if an application for bridging aid is possible for you. Together, check your sales estimate and the eligible fixed costs. If your planned figures subsequently deviate from the actual figures, the key issues paper stipulates that the bridging aid must be repaid if possible. The more plausible your plan figures are, the more likely it is that no repayment will be made at the end of the funding process.

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

Alexander Himmelmann
Tel.: +49 2173 399 47-128