Financial expert explains: Companies have to repay Corona state aid - How companies can prepare.

Financial expert explains: Companies have to repay Corona state aid - How companies can prepare.

According to a report by www.merkur.de, the state supported companies affected by the restrictions extensively and with a lot of money during the corona pandemic. However, many companies will probably have to pay these funds back because their sales have not fallen as sharply during billing as expected when they submitted their application. In Bavaria, the total payouts across all programs amount to 11.9 billion euros, with almost 20 million euros already being claimed back.

Economic ministries have found that one in four companies receiving aid payments are facing repayment. Deadlines for the final billing are extended and refunds and additional payments are possible. Nationwide, around 25 percent of companies that received state aid are expected to have to repay parts of it. However, around 40 percent of companies also receive additional payments from the federal government. A total of 13.1 billion euros in emergency aid and 63.3 billion euros were paid out nationwide for various aid programs.

Reclaiming Corona aid can have significant financial consequences for the companies affected. In particular, companies that are already economically affected due to the pandemic could come under further pressure from this additional financial burden. In addition, the reclaiming of aid funds could weaken trust in government support measures and lead to fewer companies taking advantage of government aid in the future. This, in turn, could affect the economic recovery after the pandemic. For the financial sector, demanding the aid money back could mean that it has to make more loans available to help affected companies, which in turn could increase the risks for the banks.