WIBank - New Corona support programs: HessenFonds gets underway

"A total of around €8.2 billion in support has benefited Hessian entrepreneurs and thus also small and medium-sized enterprises and freelancers since the spring during the Corona crisis. This assistance takes the form of grants, loans, credits, guarantees and tax relief. With the aid provided by the state and federal governments, we have been able to help many Hessian companies mitigate the effects of the crisis to date.

With the “Notfallkasse Hessen” (Emergency Fund) and the Hessen Fund for Economic Stabilization Measures “HessenFonds”, we are now launching further programs in Hesse. These are aimed primarily at SMEs and those who could not yet benefit from assistance. The businesses affected by the second lockdown will be more likely to be helped by the “Dezemberhilfe” (umbrella scheme) and the “Überbrückungshilfe III," said Economics Minister Tarek Al-Wazir and Finance Minister Michael Boddenberg in Wiesbaden today. Together with Dr. Michael Reckhard, member of the management board of Wirtschafts- und Infrastrukturbank Hessen (WIBank), they also took stock of the support provided to companies to date.

New: The HessenFonds for SMEs

With the "HessenFonds für Wirtschaftsstabilisierungsmaßnahmen" (Hessen Fund for Economic Stabilization Measures), the state has launched its own program for SMEs. It is an important supplement to the federal government's Economic Stabilization Fund, which is aimed mainly at large companies. "There are still Hessian companies that need further support despite government subsidies. With the HessenFonds, we can provide them with new liquidity via guarantees or equity-strengthening funds. This also applies explicitly to high-revenue start-ups," said Economics Minister Al-Wazir.

The support is granted in the form of silent partnerships or as guarantees for bank loans. As a rule, silent partnerships must be repaid within seven years. Applications can be submitted by companies whose balance sheet total exceeds 10 million euros. In addition, the companies must generate sales of more than 10 million euros and no more than 50 million euros, or have between 50 and 249 employees. Start-ups can also submit applications. "SMEs form the foundation of the Hessian economy and need a perspective. We can provide this with the HessenFonds," said Al-Wazir. Successful programs such as "Hessen Mikroliquidität" and "Liquidity Assistance for SMEs in Hessen" would also be continued in 2021. A total of another 170 million euros would be available here.

Safeguarding liquidity and jobs

"The Corona crisis is hitting the economy, and thus of course SMEs, to the core. With the new HessenFonds, we are creating another important building block to support SMEs financially in these difficult times, to provide them with urgently needed liquidity and thus to secure jobs," said Finance Minister Boddenberg. "500 million euros are available for the recapitalization of companies via silent partnerships of the state. In addition, the authorization of five billion euros in the 2020 budget law can be used for guarantees. The support of the state government in economically uncertain times: Hesse's companies can continue to rely on this in the future!"

An independent company, HessenFonds GmbH, was established to implement the recapitalization measures of the HessenFonds. This is managed by WIBank and its subsidiary, Beteiligungsmanagementgesellschaft Hessen (BM H). "We got the HessenFonds off the ground in a very short time and coordinated it closely with the federal government and the EU. Now the European Commission has also given its okay. Companies can now contact WIBank, and the applications are online," said Al-Wazir, Boddenberg and Reckhard.

New: Hesse emergency fund closes important gap

Also new is the Emergency Fund “Notfallkasse Hesse”, with which the state is helping those who have not yet been able to take advantage of assistance. "There are businesses that simply fall through the cracks of the eligibility criteria. But they too have fallen into crisis through no fault of their own. It is precisely this gap that we are closing with the emergency fund," emphasized Minister Al-Wazir.

"With our emergency fund, we are expanding the financial assistance available to companies, but also to citizens in Hesse. In total, the state plans to make up to 50 million euros available to those affected via the emergency fund. The Budget Committee has already approved 30 million euros for initial aid from this program. At this point, it becomes clear once again why the establishment of a special fund in the Corona crisis is right and important in order to be able to act quickly and flexibly," said Finance Minister Boddenberg.

As a rule, individual support from the Hesse emergency fund should not exceed 100,000 euros. Companies and businesses and non-public institutions of all sizes based in Hesse are eligible to apply. Applications are submitted to the Kassel Regional Council. Since the applications are expected to come from a variety of industries and social sectors, a so-called equity commission with representatives from the State Chancellery, the Ministry of Economics, the Ministry of Finance, the Ministry of the Interior and the Ministry of Social Affairs will review the applications and decide on the support to be provided by the Emergency Fund Hessen. The application process is scheduled to start at the end of the week and will be handled by the Kassel Regional Council.

Balance shows: Many people affected could be helped

In addition to economic aid from the federal and state governments, many Hessian companies also benefited from tax relief during the crisis: "Almost 5.4 billion euros, which are actually due to the state this year, remain where they are currently more urgently needed to get through the Corona crisis: with the companies," said Finance Minister Boddenberg. "Hesse is offering, among other things, that advance tax payments already made can be refunded or reduced. In addition, there is the possibility of having back tax payments deferred. Around 362,000 applications for this have been received and processed by our tax offices in recent months. As a result, this has so far already led to almost 5.4 billion euros, which, as an urgently needed financial injection and liquidity assistance, make it somewhat easier for those affected to get through the crisis," said Boddenberg, who also announced: "The federal and state governments have now agreed that the possibility of deferrals and suspensions of enforcement measures for taxpayers directly and not inconsiderably negatively affected economically by the Corona crisis will be extended until June 30 of next year at the latest." Concrete details are still being discussed between the federal and state governments and will be published shortly.

Economic aid implemented under high pressure

WIBank Managing Director Dr. Michael Reckhard took positive stock of the support measures after almost nine months of the Corona pandemic: "Numerous Hessian entrepreneurs - along with many others - have gone through difficult times in recent weeks and months. Together with the state and other players from Hessen's business community, we have been working under high pressure from the very beginning to develop and offer support measures. Since March, for example, we have been able to approve around EUR 12.6 million in liquidity assistance for SMEs in Hesse, around EUR 216 million as part of our direct loan Hessen-Mikroliquidität, and around EUR 8.4 million in liquidity participations via BM H. This means that we are now in a position to offer our SMEs the support they need. But it is also clear that further assistance will be needed in the coming months. Together with the state, we will constantly check whether the support offers meet the needs and also readjust them if necessary."

Reckhard thanked his employees for their high level of commitment: "The Corona pandemic has also presented us with special challenges throughout WIBank. I am proud that, thanks to our very motivated team, WIBank has been able to act at all times and thus make a significant contribution to fighting the economic consequences of Corona."

"Our current record shows how important it was to get financial support for businesses affected by the Corona pandemic up and running quickly. Many were helped to survive the past few months in this way. Whether large companies, traditional SMEs or solo self-employed workers: with our offers of help, we have provided the economy in Hesse with a wide range of support that is essential for survival. However, it is also clear that we cannot save everyone. In addition, many companies in Hesse will continue to have existential worries because of the restrictions on economic life," said Ministers Al-Wazir and Boddenberg. "Hesse will therefore continue to promote the federal government for the necessary support of the domestic economy in the Corona crisis. If necessary, own state programs for financial support will be continued or new aid will be launched. The aim is to maintain Hessen as a good business location and to give the many committed entrepreneurs a perspective."

Link to WIBank Website (DE): https://www.wibank.de/wibank/diewibank/presse/neue-corona-hilfsprogramme-hessenfonds-geht-an-den-start-541276