The ongoing coronavirus pandemic continues to cause severe economic difficulties for many companies and solo self-employed individuals. For this reason, the German federal government has approved several improvements as well as additional support for affected businesses. The new equity subsidy (Eigenkapitalzuschuss) can be applied for in addition to Bridging Aid III (Überbrückungshilfe III). Companies that have already submitted an application for Bridging Aid III should therefore not suffer any financial disadvantages during this difficult period.
Equity Subsidy
The equity subsidy is granted to companies that record a decline in revenue of more than 50% during the period from November 2020 to June 2021 compared to the reference months in 2019. The further calculation of the equity subsidy is made on a pro rata basis according to the months with more than 50% revenue loss. The following table provides an overview:
Months with revenue losses ≥ 50 percent
Equity subsidy as a percentage
1st and 2nd month
No subsidy
3rd month
25 percent
4th month
35 percent
5th month or more
40 percent
Finally, the percentage of the equity subsidy must then be offset against the total Bridging Aid III payments received.
Example:
Company C records a revenue decline of 60% during the period from December 2020 to March 2021 compared to the reference months in 2019. The company is therefore entitled to the equity subsidy, as it shows a revenue loss of more than 50% within the eligibility period. Accordingly, it is entitled to an equity subsidy at a rate of 35%, since from December 2020 to March 2021 the company recorded revenue losses of more than 50% over 4 months. The company has also applied for Bridging Aid III. This subsidy amounts to €6,000 per month (60% of the eligible fixed costs), as the company has monthly fixed costs (e.g. heating, rent, etc.) of €10,000. The equity subsidy can now be calculated by multiplying the percentage rate of the equity subsidy by the Bridging Aid III amount.
That is: €6,000 × 35% = €2,100 equity subsidy.
Further Adjustments to Bridging Aid III
- Special depreciation on seasonal and perishable goods (e.g. clothing or fruit and vegetables) is now also permitted for manufacturers and wholesalers (previously only retail).
- Companies founded up to 31 October 2020 (previously 30 April 2020) and companies operated by religious communities (hospitals, kindergartens, etc.) are additionally eligible to apply.
Companies and solo self-employed individuals are granted a right to choose between an application for Restart Aid (Neustarthilfe) or Bridging Aid III (in consultation with examining third parties).
Frequently asked questions
Frequently asked questions
Who is entitled to the equity grant supplementing Überbrückungshilfe III (Bridging Aid III)?
Companies that recorded a revenue decline of more than 50 percent in at least three months between November 2020 and June 2021, compared with the corresponding reference months in 2019, are eligible. The equity grant is paid in addition to Überbrückungshilfe III and must be accounted for separately.
How is the equity grant supplementing Bridging Aid III (Überbrückungshilfe III) staggered?
For the first and second month with a revenue decline of at least 50 percent, no supplement is granted. From the third month, the supplement amounts to 25 percent, from the fourth month 35 percent, and from the fifth month 40 percent. These rates are applied to the disbursed Bridging Aid III.
How exactly is the equity subsidy calculated?
The percentage rate of the equity subsidy is multiplied by the monthly Überbrückungshilfe III (Bridging Aid III). Example: With bridging aid of EUR 6,000 per month and a surcharge rate of 35 percent (four months with revenue declines exceeding 50 percent), the equity subsidy amounts to EUR 2,100.
Which companies are newly eligible to apply for Bridging Aid III (Überbrückungshilfe III) following the adjustments?
Eligibility now extends to companies founded up to 31 October 2020 (previously 30 April 2020), as well as companies under the sponsorship of religious communities, such as hospitals or kindergartens. This significantly broadens the range of eligible businesses.
Who is entitled to claim special depreciation on seasonal and perishable goods?
Special depreciation on seasonal and perishable goods such as clothing, fruit, or vegetables is now also available to manufacturers and wholesalers. Previously, this rule was limited to retailers.
Can solo self-employed individuals apply for both Neustarthilfe and Überbrückungshilfe III?
No. Companies and solo self-employed individuals must choose between Neustarthilfe (restart aid) and Überbrückungshilfe III (bridging aid III). The decision should be made in consultation with a certified third-party reviewer, as the two programs cannot be claimed in parallel.