The big federal state survey, part II: These corona aids are available from the federal states

Many federal states have special support programs for start-ups. In the second part of our series, we take a look at the measures in Bremen, Hamburg, Hesse, Mecklenburg-Western Pomerania and Lower Saxony. Click here for Part I of the survey with the states of Baden-Württemberg, Bavaria, Berlin and Brandenburg. Part III with NRW, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia can be found here.

The federal government has made around two billion euros available to support start-ups affected by the coronavirus crisis. It is passing on part of this to the state development banks via its development bank KfW. The aim of this "Pillar II" is to support start-ups and small and medium-sized enterprises with mezzanine (i.e. a mixture of equity and debt capital) or equity financing. How start-ups actually obtain aid varies from state to state. Our overview shows what founders in which federal state can count on and how much money has already flowed in.

Bremen:

The Free Hanseatic City has launched the "Equity Capital in the Corona Crisis" program. Bremen's state development bank, Bremer Aufbau-Bank (BAB), is handling the program. The bank is helping companies with a turnover of no more than 75 million euros. The companies must have been economically viable before the coronavirus pandemic and now be in difficulties as a result of the crisis.

The BAB provides up to 800,000 euros per company, both as a silent participation (e.g. through subordinated loans) and as a minority shareholder. Interested start-ups must submit annual financial statements, a business plan and a description of their emergency situation.

By mid-January, Bremen had approved one application and is still reviewing others. According to the Senate Department for Economics, Labor and Europe, a total of 300,000 euros has been granted so far.

Hamburg

Hamburg had already responded quite early in the crisis with an emergency aid program, the "Hamburg Corona Emergency Aid - Innovative Startups Module", for which new applications are no longer possible.

Instead, the Hanseatic city has now also set up an investment fund for start-ups and small and medium-sized enterprises. The "Corona Recovery Fund" is organized by Hamburgische Investitions- und Förderbank (IFB) and Beteiligungsgesellschaft Hamburg (BTG). The IFB is focusing on exit-oriented start-ups that can receive a silent participation of up to EUR 500,000. BTG is responsible for start-ups that are not focused on an exit. It issues silent participations of up to 800,000 euros.

To date, Hamburg has paid out 35 million euros to over 200 companies via the emergency aid and the fund.

Hesse

According to the Hessian Ministry of Economics, the Wiesbaden state government has not launched any special start-up aid. However, founders can use the programs that are aimed at all companies, such as the "HessenFonds", from which they can obtain guarantees for bank loans as well as silent partnerships. The Hessen Economic and Infrastructure Bank issues guarantees for amounts of 2.5 million euros or more, while silent partnerships are capped at 25 million euros.

Start-ups are eligible to apply if they have received at least €5 million from private investors in at least one financing round since January 1, 2017 (including the capital raised).

Mecklenburg-Western Pomerania

The state on the Baltic Sea also has a state-owned development bank, Bürgschaftsbank Mecklenburg-Vorpommern, which issues funds to start-ups and other small companies. Both silent and open investments are possible. As part of the "MBMV Sonderunterstützung KfW 2020" program, founders can raise between €50,000 and €800,000 as a silent partnership. The open participation has no minimum amount, but is also capped at 800,000 euros.

By the end of last year, 22 companies had applied for funding and nine had already received assistance. By mid-January, Mecklenburg-Vorpommern had issued 4.71 million euros in the course of the coronavirus crisis.

Lower Saxony

In Lower Saxony, the Mittelständische Beteiligungsgesellschaft (MBG) is responsible for awarding coronavirus aid. The "MBG Stabilitätsfonds 2020" can invest in start-ups on a silent or open basis. As in many other states, investments of up to 800,000 euros are possible. However, if private co-investors are found, this amount can also be increased.

Lower Saxony had already launched a "Corona Bridgefonds Startups" at the beginning of last year, but this expired at the end of October 2020. Start-ups could apply for up to 50,000 euros.

By mid-January, Lower Saxony had issued 15 million euros in investments alone, in addition to several million euros that it paid out via emergency aid.