Corona Relief Fund WKO FAQ - Applications for guarantees are now possible (08.04.)

1. What is the goal of the Corona Relief Fund?

The rapid provision of financial resources to Austrian companies that are experiencing serious liquidity shortages due to the Corona crisis. This support is intended to ensure the economic survival of the companies.

2. How much money is available for this?

The total budget for all measures of the Corona Relief Fund amounts to 15 billion euros, which can be used flexibly according to the immediate needs, on the one hand for fixed cost subsidies, and on the other for guarantees. All measures have one goal: to ensure the liquidity of companies.

3. For which companies is the Corona Relief Fund available?

Companies and sectors that are particularly affected by measures such as entry bans, travel restrictions, or assembly restrictions and are experiencing liquidity problems. In addition, the Corona Aid Fund helps companies that are facing large sales losses and the threat to their business foundations as a result of the Corona crisis.

4. Who will manage the Corona aid fund?

The newly established COFAG – Covid-19 Financing Agency, together with AWS, ÖHT and OeKB; the home bank is the single point of contact.

5. With which instruments does the Corona Aid Fund support?

Guarantees from the Republic and direct subsidies are intended to cover the liquidity needs of companies.

Guarantees

1. What scope do the guarantees of the Republic have?

The Republic’s guarantee covers 90% of the loan amount. This ensures that working capital loans are secured. The maximum limit is 3 monthly sales or a maximum of 120 million euros. This limit can only be increased in justified exceptional cases. The term of the loan is a maximum of 5 years and can be extended by up to 5 years.

2. How much is the warranty fee?

A maximum credit rate of 1% and guarantee fees, which are required by the EU and vary between 0.25% and 2% depending on the size of the company and the duration of the guarantee, are applied.

3. When can the existing guarantee be drawn from a bank?

The guarantee can be invoked if the borrower is in default with his payment obligations under the credit agreement, insolvency proceedings have been opened against the borrower, or the opening of the proceedings has been postponed due to lack of sufficient funds.

4. What are the requirements for the Republic’s guarantee?

The location and business activity must be in Austria, and there must be a liquidity requirement for the domestic location. For public companies, bonuses may only be paid up to 50% of last year’s bonuses to directors, and no dividend payments from March 16, 2020 to March 16, 2021 may be made from this liquidity aid.

5. How do I get the warranty?

The home bank is the single point of contact. Together with the company, it fills out the application form. Depending on the company, this application form is then forwarded to the Austrian Control Bank (large companies), to the Austria Wirtschaftsservice GmbH (small and medium-sized enterprises) or to the Austrian Hotel and Tourism Bank GmbH (tourist companies).

COFAG issues credit guarantees for loans granted by banks to companies through these three funding agencies. COFAG guarantees 90% of the loan amount.

6. Is this guarantee equivalent to a federal guarantee?

Yes, and is therefore the highest level of security that the Republic of Austria can grant.

7. From when can the warranty be claimed?

from April 8, 2020

8. How long does it take from submitting the application to receiving the warranty?

The goal is to process complete applications from submission to approval within 7 working days. First payments are therefore expected to be made as early as April 15, 2020.

9. What is not the goal of the Republic’s guarantee?

Unfunded are debt restructuring, investments or dividend payments from 16.3.2020 to 16.3.2021, bonuses to directors (limited to a maximum of up to 50% of the previous year) and share buybacks.

Grants

1. What are the subsidies under the Corona Relief Fund?

Subsidies are being provided to cover fixed costs for companies during the Corona crisis.

2. Which companies receive these fixed cost subsidies?

• The location and business activity must be in Austria and fixed costs must have been incurred in Austria.
• The company suffers a revenue loss of at least 40% in 2020 during the Corona crisis, caused by the spread of COVID-19
• Companies must take all reasonable measures to reduce fixed costs and to retain jobs in Austria.
• Companies that were healthy businesses before the Covid-19 crisis

3. What is the fixed cost subsidy?

The fixed cost subsidy is tiered and depends on the company's sales shortfall; if it exceeds 2,000 euros within 3 months, the federal government pays:

• 40 - 60% failure: 25% replacement performance
• 60 - 80% failure: 50% replacement performance
• 80-100% failure: 75% replacement power

4. What are fixed costs?

Basically, business premises rentals (if the rent could not be reduced and is directly related to the business activity), insurance premiums, interest expenses (if these could not be deferred), contractually required payment obligations (which could not be deferred or reduced), license costs, payments for electricity/gas/telecommunications.

In addition: loss of value for perishable/seasonal goods, provided that they lose at least 50 % % of their value during the Covid measures.

5. Is the entrepreneur's salary part of the fixed cost allowance?

Yes, an appropriate employer wage of a maximum of 2000 euros per month (analogous to the regulations from the hardship fund).

6. How are the fixed costs calculated?

The basis for calculation is the fixed costs and sales losses of the company between March 15, 2020 and the end of the Covid measures.

7. What should be taken into account when applying for a fixed cost subsidy?

The applications must include a breakdown of the actual fixed costs incurred and the actual losses in sales that occurred.

8. What obligations do companies have to fulfill?

Companies must commit to taking special care to maintain jobs and to take all reasonable measures to reduce fixed costs and retain Austrian jobs. The documents required for the review must be provided upon request to ensure proper use of the funds.

9. Who decides about the fixed cost subsidy and where should the application be submitted?

The application must be submitted to the online tool of AWS for a fixed cost subsidy. The payment is made through the home bank in coordination with AWS.

10. From when can the fixed cost allowance be applied for and for how long?

11. When will the payment be made?

Upon determination of the damage, that is, after the end of the fiscal year and submission of a confirmation of the decrease in sales and the reimbursable fixed costs.

12. Does the fixed cost subsidy have to be repaid?

13. Is there an upper limit for the fixed cost subsidy?

Yes. The fixed cost subsidy is limited to a maximum of 90 million euros per company.

14. Does a fixed cost allowance constitute a tax liability?

No, but it reduces the deductible expenses in the relevant fiscal year.

15. Who is exempt from the fixed cost subsidy?

Companies that had more than 250 employees on December 31, 2019 and terminated employees instead of taking out short-term work furlough following the outbreak of the COVID-19 crisis. The entire financial and insurance sector (banks, credit institutions, insurance companies, securities firms, and other financial companies subject to prudential regulatory requirements) is also excluded.

Source https://www.wko.at/service/faq-corona-hilfs-fonds.html

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