Bridging aid III — An overview of enlargement

The corona pandemic continues to pose immense challenges for society and the economy. The Federal Ministry of Economics and Energy (BMWi) and the Federal Ministry of Finance (BMF) have therefore expanded the bridging aid. This supports companies and self-employed people with loss of turnover due to corona. This extension is called bridging aid III. In this blog post, we would like to give you an overview of this federal government program, who can apply for funding and show you what else you need to consider.

What is bridging aid III?

Bridging Aid III, also sometimes referred to as ÜH III below, is the continuation of bridging aid I and II. It is the central program of the Federal Government for companies with a significant decline in turnover due to corona. It is intended to support companies, solo self-employed people and freelancers who are particularly affected by pandemic control measures. These are grants that do not have to be repaid.

Who is entitled to bridging aid III?

Companies, solo self-employed people and freelancers with an annual turnover of up to 750 million euros worldwide in 2020 are currently eligible to apply. The turnover limit does not apply for companies affected by closing orders. This applies to companies:

• retail trade,
• the event and cultural sector,
• the hotel and catering industry,
• the pyrotechnics sector as well as for wholesalers and the travel industry.

Church and non-profit companies, as well as organizations from all industries, are also eligible to apply. However, companies that have already been in economic difficulties as of December 31, 2019 are still exempted from support. It is assumed here that the corona pandemic is not the cause of the imbalance. However, there are exceptions to this, for example aid can also be granted to small and micro-enterprises if they were regarded as companies in difficulty according to the EU definition as of 31 December 2019, but are not the subject of insolvency proceedings and have received neither rescue aid nor restructuring aid. Companies can benefit from UEH III if they have a drop in turnover of at least 30% in one month in the period from November 2020 to June 2021 compared to the reference month in the year 2019 have suffered. In this case, UEH III can be applied for for the month in question. This applies regardless of whether the company is directly or indirectly affected by closure measures as part of the lockdown. Applications can be submitted since February 10, 2021. The application is filed in the federal state in which the company is managed for income tax purposes. The location of the establishment (s) is not important. It is not allowed to apply for aid in several federal states. But attention: companies that upon were founded on October 31, 2020, can none Submit applications for bridging aid III. By the way: For companies that are between January 1, 2019 and October 31, 2020 founded were, and in justified cases also with exceptional operational circumstances There are special rules.

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How much is bridging aid III?

The grants are subject to maximum monthly funding contributions. The UEH III should amount to a maximum of 1.5 million euros per company per month. According to information on the application portal, a maximum amount of 3 million euros should apply for affiliated companies. The amount of subsidies for the respective company is based on the decline in sales in 2020 compared to the reference month of 2019 and is staggered as follows:

• 100% of fixed costs in the event of a drop in turnover of more than 70%
• 60% of fixed costs when sales fall by 50 to 70%
• 40% of fixed costs when sales fall by more than 30%

Eligible fixed costs within the meaning of bridging aid III include rents and leases as well as financing costs and energy costs. The catalog of reimbursable costs also includes structural modernization, renovation or conversion measures for hygiene measures of up to 20,000 euros, but also investments in digitization. This also includes the Socialwave WiFi marketing package. The Socialwave WiFi marketing package is eligible for funding through features such as the digital menu or corona registration. Marketing and advertising costs are eligible for funding in the amount of the corresponding expenditure in 2019. Under certain conditions, retailers can include 100% of their amortization of current assets in fixed costs. By the way: Donations (except for non-profit companies) do not count as turnover, as there are no supplies and services for consideration.

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Equity subsidy as an extension

On April 1, 2021, the so-called equity subsidy was also introduced. For example, companies, self-employed people and freelancers who have suffered a drop in turnover of more than 50% in at least three months from November 2020 to June 2021 will receive an equity subsidy in addition to bridging aid III upon request. This is granted as a percentage of certain eligible fixed costs and rises up to 40% over the duration of the slump in turnover.

What are the prerequisites for funding?

When eligible to apply for bridging aid III, the following applies:

• If there is a drop in turnover of at least 30% in one month due to corona
• This applies to companies with an annual turnover of up to 750 million euros in 2020
• There is no turnover limit for companies directly affected by the closure

When will bridging aid III be paid out?

Since February 12, 2021, companies have received UEH III advance payments of up to 800,000€ per funding month. Since March 3, 2021, companies affected by the lockdown with an annual turnover of over 750 million euros have also been able to benefit from these advance payments. The implementation and final payment are carried out by the respective federal state.

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How, where and when can affected parties submit applications?

The application is always submitted by all parties concerned via a tax advisor, an auditor, a lawyer and certified accountants. They are examining the claimed sales slumps and fixed costs. You apply for bridging aid via the joint application platform. It is possible to apply for bridging aid III from February 10 to August 31, 2021. Amendments have been tabled since 27 April 2021. The costs are subsidized. If you do not yet have an auditing third party, you can find them here, among others:

• Tax advisor search service
• Professional register for auditors/certified accountants
• Tax advisor search service of the German Tax Consultants Association e.V. (DStV)
• Lawyer register

Can you apply for bridging aid III if you have received other aid before?

Yes! Benefits from bridging aid II for November and December 2020 will be credited. However, companies that receive November-December aid cannot apply for help through UEH III for these months. Companies and solo self-employed people who have already submitted an application for restart aid cannot apply for bridging aid III. You receive a subsequent right to choose between restart aid and bridging aid III at the time of the final statement.

conclusion

With bridging aid III, the Federal Government has made adjustments and has once again digged deep into its pockets. An even more comprehensive program was set up than its predecessors. It is a major step forward in providing as many companies as possible with the highest possible financial support. Check to what extent it is also possible for you and your company to make use of UEH III and take advantage of the opportunities available, for example for digitization. This also includes the Socialwave WLAN Marketing Package, which is one of the eligible fixed costs. With our WLAN marketing package, your customers/patients/guests advertise for you, are happy and recommend you to others.