The German government is set to assist small business owners and freelancers in this time due to the effects of coronavirus on the economy.
Experts have estimated that the social distancing measures initiated to curb the spread of the virus will slash Germany’s economic output in 2020 by 2.8 to 5.4 percent.
The economic fallout of the global coronavirus pandemic is likely to be huge – and it is already hitting Germany’s self-employed workers and small businesses particularly hard.
The coronavirus will lead to an ‘inevitable’ recession. That’s why the lawmakers passed a €750-billion relief package to ease the pain.
In an effort to cushion losses and prop up the German economy during the crisis, the federal government and 16 states have vowed to provide financial support to those affected, to the tune of nearly 1.1 trillion euros.
In a marker of how grave the current situation is, this marks the first time that the government has taken on new debt since 2013.
If you are an individual or a family in need of support, there are different emergency schemes, which came into effect on April 1, that you can advantage of.
Federal Finance Minister Olaf Scholz stressed that micro enterprises, freelancers and one-person businesses now need special support, since the COVID-19 crisis has hit them hard.
“That is why the federal government is now providing swift, unbureaucratic emergency assistance.” It is a non-repayable grant, stressed Olaf Scholz, not a loan. “Nothing needs to be repaid.”
If you are a freelancer, self-employed or have a small business, here’s how you can apply for financial support if you’ve been affected by the COVID-19 crisis.
Who is eligible for coronavirus financial assistance?
To be eligible, you must be a sole proprietor, working as a freelancer or the owner of a small business with less than 10 full-time employees.
You must be registered with a German tax office and carry out your work from a permanent establishment / address in Germany or have a German management headquarters.
What is the scope of the aid?
Companies or self-employed persons from all economic sectors with up to five employees can apply for a one-time grant of up to 9,000 euros. Companies with up to 10 employees can apply for a grant of up to 15,000 euros.
These grants will be used to cover operating costs for three months. They do not have to be paid back and are designed to involve as little red tape as possible.
As this federal programme supplements other programmes that have already been adopted by the federal states, all applications and grants will be handled by the states.
This means that the exact application procedure and the sum offered may vary from state to state.
Do I have to prove financial difficulties?
It would take too long to thoroughly investigate every single application. Instead, you must give a solemn declaration that you are experiencing financial difficulties as a direct result of the COVID-19 crisis.
These difficulties cannot have started before December 31, 2019.
Incorrect information could be seen as an attempt to commit subsidy fraud, which carries as a penalty up to five years imprisonment or a fine.
How do I apply?
The application process is designed to be as quick and un-bureaucratic as possible. You can submit your application electronically to your federal state.