Bridge over a ravine

© Adobe Stock/Feodora

The application system for the Bridging Assistance Programme III has now been activated and put online. Bridging Assistance III is available to companies that are severely affected by the COVID-19 pandemic and the current partial lockdown. Until the end of June, these companies can receive support of up to €1.5 million per month. This aid is not repayable. The final decision regarding the applications and the payment of the actual amounts by the Länder will be made as of March. Until then, companies can receive up to €100,000 in advance payments per month. The first advance payments of up to €400,000 will be made as of 15 February 2021.

Applications for Bridging Assistance III can be made via the pan-German platform at (in German).

Overview of Bridging Assistance III:

1. Who is entitled to apply?

We are simplifying the eligibility criteria. A company that experienced a drop in turnover of at least 30% in a month compared to the reference month in 2019, because it had to close due to COVID-19 for example or because fewer customers came to the store because of COVID-19, can apply for Bridging Assistance Programme III. Businesses can apply for Bridging Assistance Programme III for each month in which there was a drop in turnover.

The funding period covers the period from November 2020 to June 2021.

2. How much will be reimbursed?

The maximum amount of funding per month has again been significantly increased. Companies can receive up to €1.5 million in bridging assistance per month (instead of the €200,000 or €500,000 provided up until now). Upper limits of the European State aid law apply. Thanks to the intensive efforts of the Federal Government, the European Commission has decided to raise the threshold of the Temporary Framework. As soon as the European Commission approves of the transposition of this increase into national law, a total of up to €12 million per business will be available in terms of State aid, provided that the company has not yet used up all of its State aid allowance (for more information on State aid law, see point 4). An increase of the monthly funding of up to €3 million is being prepared for affiliated companies.

As before, the exact subsidy amount is based on the drop in turnover compared to the corresponding month in 2019 and is structured as follows:

  • up to 40% of the eligible fixed costs will be reimbursed in case of a drop in turnover of 30% to 50%,
  • up to 60% of the eligible fixed costs will be reimbursed in case of a drop in turnover of 50% to 70%,
  • up to 90% of the eligible fixed costs will be reimbursed in case of a drop in turnover of more than 70%.

3. Will there be part payments?

To make sure that those who were affected by losses receive the funding quickly, the Bridging Assistance Programme III includes an advance payment via the Federation. The Federation is thus making advance payments on behalf of the Länder, which continue to be responsible for the payments of the actual amounts of assistance.

Advance payments can amount up to 50% of the requested funding amount, up to a maximum of €100,000 per month for which support is granted. Therefore, for the entire funding period of Bridging Assistance Programme III (November 2020 to June 2021), companies can receive up to €800,000 in advance payments. The first advance payments of up to €400,000 can be made as of 15 February 2021. Advance payments of more than €400,000 will be paid as of the end of February. The disbursement of the actual amounts of assistance once the Länder have processed the applications will begin in March 2021.

4. Do I have to prove financial losses?

This depends on the amount of funding applied for and the relevant aid framework.

Applicants can choose the aid framework under which they apply for Bridging Assistance III, and can therefore use whichever scheme is more favourable to them.

If applicants choose the federal framework for assistance for fixed costs as the basis to calculate their State aid (a maximum of €10 million per company in future), they should know that due to European State aid law, they will have to document the relevant uncovered fixed costs. Depending on the size of the company, funding is possible for up to 70% to 90% of the uncovered fixed costs. In order to make the documentation of uncovered fixed costs easier, losses incurred by a company in the period of March 2020 - June 2021 can be considered as uncovered fixed costs.

Alternatively, if the applicant chooses the arrangement for small amounts of compatible aid and the De minimis Regulation, the grants will be awarded without proof of losses needing to be furnished. Grants totalling €2 million per company can be awarded on the basis of the rules governing small amounts of compatible aid and the De minimis Regulation.

It should be noted that previous subsidies from other funding programmes that were granted on the basis of the above mentioned State aid legislation will be counted towards the relevant upper limit.

5. What is being reimbursed?

There is a fixed model catalogue of fixed costs that can be reimbursed.

This includes: leases, property taxes, insurance premiums, subscriptions and other fixed expenses and rental costs for vehicles and machinery, interest expenses, the cost of financing leasing instalments, expenses for electricity, water, heating etc.; personnel expenses that are not covered by short-time allowances are subsidised at a flat rate of 20% of the fixed costs. Finally, construction work for the implementation of hygiene concepts can be subsidised, as can marketing and advertising costs.

Cost items that can be reimbursed now also include write-offs of up to 50% of the value of assets as well as investments in digitalisation. In addition to the cost of construction work that was necessary due to hygiene regulations, the fixed costs also consider investments in digitalisation (i.e. establishment of online shops, entry costs for large platforms). In both of these areas, costs that arose outside of the funding period can be included. Expenses for construction work of up to €20,000 per month between March 2020 and June 2021 are being refunded. Up to €20,000 can be funded on a one-off basis.

Amendments have been made with regards to the expenses that can be refunded specifically for those sectors that have been particularly affected by the crisis, such as travel agencies and tour operators, the culture and events industry, the retail trade, the pyrotechnics industry and own-account workers:

  • Retailers should not be left bearing all expenses for seasonal goods. Therefore, the loss in value of perishable goods and of seasonal goods from the 2020/2021 winter season is regarded as a cost item. This applies, among other things, to Christmas articles, fireworks and winter clothing. However, it also applies to perishable goods that became unusable when they were not sold, e.g. cosmetics. 100% of these write-offs of goods can be counted as fixed costs. This complements the existing option to write off up to 50% of the value of fixed assets as expenses eligible for funding.
  • The travel industry is one of the most affected sectors. We are providing additional support by comprehensively taking into account the expenses incurred and drops in turnover that have occurred due to cancellations. The arrangements foreseen until now have been complemented so that external preparation and cancellation expenses are increased by a 50% flat rate for internal costs and can be included in the fixed costs.
  • A sector-specific arrangement applies to the pyrotechnics industry, which suffered greatly from the ban on the sale of New Year’s Eve fireworks. Members of the industry can apply for funding for the period March to December 2020. In addition, funding can be granted for storage and transport costs for the period December 2020 to June 2021

6. What support is available to own-account workers?

Own-account workers who incur only low operating costs can apply for the New Start Assistance Programme as part of the Bridging Assistance Programme III. An application for the New Start Assistance Programme will probably be possible as early as February.

This one-off grant of a maximum of €7,500 will support own-account workers whose economic activity is restricted due to COVID-19 in the funding period from 1 January to 30 June 2021.

The New Start Assistance usually amounts to 25% of the annual turnover of 2019. Special rules apply to applicants who only started their self-employed activity after 1 January 2019. The grant is paid out as an advance payment before the actual turnover in the funding period is known. Only after the funding period ends, which means after July 2021, will the grant amount available to own-account workers be calculated. The calculation is based on the final turnover made between January and June 2021. Own-account workers are entitled to keep the full amount of the grant if they suffered a drop in turnover of more than 60%. If the loss in turnover is lower than that, the grant is to be paid back (on a pro rata basis).

The New Start Assistance also provides support to employees in the performing arts with short-term contracts of up to 14 consecutive weeks, and non-permanent employees with temporary employment contracts of less than one week.