Corona aid: Every fourth company has to pay back parts - financial expert explains the background

Corona aid: Every fourth company has to pay back parts - financial expert explains the background

According to a report by www.stern.de,

The corona pandemic has brought many companies into financial difficulties, and so the government provided quick and unbureaucratic financial aid. This has meant that almost one in four companies that took advantage of government aid has to pay back part of it. However, around 40 percent of companies also receive additional payments from the federal government.

These repayments result from the final settlement that was associated with the financial aid. The actual sales declines and eligible fixed costs are compared with the original forecasts. If the actual decline in sales was less than expected, companies will have to pay back part of the aid they received.

According to the Ministry of Economic Affairs, around 13.1 billion euros in emergency aid and 63.3 billion euros were paid out for programs such as November, December or restart aid. The deadline for the final bill was October 31st, but due to the ongoing situation it was extended to January 31st and, upon request, to March 31st at the latest.

As a financial expert, I see the need for companies to carefully review their financial situation in order to avoid unforeseen repayments. These additional financial burdens could have a negative impact on the liquidity and long-term stability of companies. It is important that companies critically review their accounting and financial forecasts to identify possible inconsistencies and prepare to adapt to current requirements if necessary.