2.1 Economic Stabilisation Fund (ESF, planned)
Who?
Eligible companies are those which were not an undertaking in difficulty (UID) on 31 December 2019 and which exceed two of the following three criteria:
- a balance sheet total of EUR 43 m
- a turnover of EUR 50 m
- an annual average of more than 249 employees.
What?
The fund serves to support the real economy and has two instruments:
- the assumption of guarantees for debt instruments and liabilities of companies with a maximum volume of EUR 400 bn
- the possibility of participating in the recapitalisation of companies, e.g. by acquiring shares with a volume of EUR 100 bn.
The measures are subject to requirements. Further details are to be regulated by a legislative decree.
By whom?
In most cases, the Federal Ministry of Finance and the Ministry of Economics and Energy or the promotion bank
Kreditanstalt für Wiederaufbau" (KfW) decide on the applications. Whether the application is approved depends, among other things, on how important the company is for the German economy. The details are regulated in a legislative decree. The individual measures must be notified to the Commission.
2.2 Loans from the KfW
Who?
Eligible applicants are undertakings that are not in difficulty (UID) or that only became a UID after 31 December 2019 due to the coronavirus crisis.
What?
1. First, there is a low-interest loan programme (Unternehmerkredit) that covers up to 90% of the risk of loans. The loan amount is up to EUR 1bn per company and is limited, among other things, either by twice the annual wage bill for 2019, 25% of the annual turnover in 2019 or the specific liquidity needs of a beneficiary for the next 12 months (18 months for SMEs). In addition, for loans exceeding EUR 25m, the loan amount may not exceed 50% of the total debt volume or 30% of the balance sheet total of the group of companies .
The loan may have a maximum duration of 10 years.
2. Second, there is a low-interest loan programme under which KfW provides syndicated loans with other banks (Direktbeteiligung für Konsortialfinanzierung).
The amount of the loan is limited to either twice the annual wage bill for 2019 or 25% of the annual turnover in 2019 or the specific liquidity requirements of the company for the next 12 months (18 months for SMEs) on the basis of an appropriate self-assessment of the beneficiary company.
The risk assumption by KfW is up to 80% of the loan but not more than 50% of the company’s total debt or 30% of the balance sheet total of the group of companies.
The term of the loan may not exceed six years.
3. Thirdly KfW Rapid Loan 2020 (Schnellkredit)
Who can receive the aid?
Small and medium-sized undertakings which:
- had a profit in 2019 or on average over the last three years;
- were not in difficulty* (not UID) on 31 December 2019;
- have more than 10 employees at their disposal;
- have been active on the market at least since 1 January 2019; and
- have an orderly financial situation.
What does the aid consist of?
New loan programme. The bank receives a 100% indemnity from the KfW, secured by a guarantee from the federal government.
The loan amount is up to 25% of the annual turnover in 2019 with a maximum of EUR 800,000 for undertakings with more than 50 employees, and a maximum of EUR 500,000 for undertakings with up to 50 employees.
The loan is approved without further credit risk assessment by the bank or KfW. This allows the loan to be approved quickly.
The KfW loans can be applied for through the main bank.
2.3 Federal scheme State Guarantees 2020
Who can receive the aid?
Undertakings which are not in difficulty* (not UID) or which only got into difficulty after 31 December 2019 owing to the coronavirus crisis can apply.
What does the aid consist of?
New loan guarantee scheme:
- The annual guarantee premiums are set at 25 basis points ("bps") for SMEs and 50 bps for large undertakings for the first year. For years two and three, they are set at 50 bps for SMEs and 100 bps for large undertakings. For years four to six, they are set at 100 bps for SMEs and 200 bps for larger undertakings.
- The maximum term of the guarantees is six years.
- For guaranteed loans with a maturity beyond 31 December 2020 the loan amount is limited to either twice the annual wage bill for 2019, 25% of the annual turnover 2019 or the specific liquidity needs of the beneficiary for the next 12 months (18 months for SMEs) based on appropriate justification and self-certification by the beneficiary of its liquidity needs.
- For guaranteed loans with a maturity until 31 December 2020, the amount of the loan principal may be higher with appropriate justification and proportionality of the aid.
- The public guarantee may not exceed: (i) 90% of the loan principal where losses are sustained proportionally by the credit institutions and the state or (ii) 35% of the loan principal where losses are first attributed to the state and only then to credit institutions and (iii) for both cases where the loan decreases over time, the guaranteed amount has to decrease proportionally
From whom can companies receive the aid?
The aid may be granted by public bodies, such as federal authorities and regional authorities or the guarantee banks.
2.4 State guarantee scheme for trade credit insurance
Who is eligible for the aid?
All undertakings active in the trade credit insurance sector in Germany that were not in difficulty* (not UID) on 31 December 2019.
What does the aid consist of?
The state assumes a guarantee of up to EUR 30bn for indemnification payments by credit insurers for the year 2020. The credit insurers bear the losses up to an amount of EUR 500m themselves and assume the default risks that exceed the guarantee of the Federal Government.
The participating trade credit insurers will pay 65% of annual gross premiums for the year 2020 to Germany.
The measure covers purchasers inside and outside Germany and claims related to the delivery of goods or services that take place between 1 January 2020 and 31 December 2020, provided that the trade credit insurer participates in the measure. Claims that have been notified before 1 March 2020 are excluded.
Germany received a binding commitment from the trade credit insurers active in Germany participating in this measure to retain their existing credit limits at least up to levels at the time of the agreement.
From whom can companies receive the aid?
The Federal Ministry of Finance is responsible for the measure and concluding the necessary individual agreements with the credit insurers.
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