Medium-sized businesses to receive additional corona aid

Medium-sized businesses to receive additional corona aid

In the corona crisis, the federal government wants to decide on additional aid on a rough scale, especially for small and medium-sized businesses.

The "corona" cabinet wants to approve an additional credit program, the german press agency has learned from government circles. The goal is to prevent a wave of bankruptcies and preserve jobs.

This involves improvements in credit conditions. Companies to be covered by 100 percent state liability for a limited period of time.

The state-owned forderbank k has so far borne up to 90 percent of the credit risk in the special loan program. There have been repeated complaints from the business community that the credit terms offered by the house banks are too tight and that loans are not being granted because companies are not creditworthy in the current crisis.

Over the weekend, the ministries of finance and economics held intensive discussions on the new program. On late sunday evening, an agreement was reached, according to reports.

Loans for small and medium-sized companies are now to be secured for a limited period with a 100 percent state guarantee. It was said that the maximum limit would be 500.000 euro per company could lie. The state could take over guarantees in a total volume of up to 300 billion euros for it.

The EU commission cleared the way for the planned program on friday. The commission approved programs under which member states could, for example, make interest-free loans or assume 100 percent risk liability. The maximum limit per company is 800.000 euro.

The aim is to quickly cover the urgent liquidity needs of small and medium-sized enterprises, the commission had said.

In view of the hundreds of thousands of businesses that have closed and the widespread suspension of production, the german chamber of industry and commerce (DIHK) has called on the federal government to introduce a further credit package.

The economy is now much more severely affected by the pandemic than it was in mid-march, when the federal government decided on its corona package. "In addition, chain reactions are now increasing in the broad economy," said DIHK president eric schweitzer on sunday.

"The federal government’s protective umbrella already contains good instruments that have a crisis-mitigating effect," emphasized schweitzer. "But it is urgently necessary to develop this further now.

For large parts of the german economy, the current standstill is dramatic."According to a DIHK flash survey, almost one in five companies nationwide is threatened with bankruptcy. "Among them are tens of thousands of hitherto perfectly healthy small and medium-sized enterprises," said schweitzer.

The chief executive of the federal association of liberal professions, peter klotzki, had complained that house banks often became a pin’s ear because of their "defensive behavior. "At this point, it was possible to optimize by having the state exempt the banks from 100 percent liability."

Demand from companies for corona loans remains high. By thursday, companies had submitted around 3200 applications with a volume of around 11 billion euros to the k, the federal ministry of economics and technology announced on request. So far, about 2700 applications with a total of 960 million euros have been pledged.

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