IFB offers support module for start-ups

21 April 2020

Bank and senate back growth-orientated start-ups endangered by corona crisis

The senate and IFB Hamburg are setting up an aid programme from Monday (April 20, 2020) for innovative, growth-orientated start-ups in Hamburg as part of the Corona Emergency Aid. Many start-ups find themselves in dire straits in the wake of the corona crisis either due to a lack of sufficient equity capital or as they have not yet earned a profit or are just nearing that threshold. Financed mainly by venture capital investors, start-ups and are usually not creditworthy, but are drivers growth and innovation. The senate is now providing assistance in the form of repayable grants.

Securing Hamburg’s economic future

Michael Westhagemann, Senator for Economics, Transport and Innovation, remarked: “We have to rely on creativity and innovative strength especially in a crisis. The innovative potential of a region plays a major role in meeting the challenges of the future, especially in crises, and in taking advantage of the opportunities offered. For this reason, we must give start-ups in Hamburg special support.” Andreas Dressel, Senator for Finance, added: “Many of the start-ups in our city have launched successfully with private and public capital in recent years. These companies, which are enormously important for the future viability of Hamburg’s economy, should not be left to fold amid the corona crisis. That is why we have decided, across all ministries, to include a separate, supplementary support module for Hamburg’s start-ups in addition to the federal aid in our emergency aid programme. This shows that we are investing in the future of Hamburg’s economy even in the crisis.” Dr. Carsten Brosda, Senator for Culture and Media, noted: “It is important for Hamburg as a media and digital location to be leader of innovation in terms of technology. Start-ups play a key role in Hamburg’s perceived image as a cosmopolitan, creative city full of international ideas and companies with innovative businesses. This makes the support of founders and entrepreneurs, especially in these difficult economic times, investing in an attractive business environment for start-ups all the more important.” The funds target rapidly-growing companies whose business model is based on proprietary development by the company. The grants should help overcome economic liabilities triggered by the corona crisis and can be used for new products, corporate development, market launches and growth.

Prerequisities for emergency aid

Innovative, growth-orientated start-ups that meet the following requirements are eligible to apply for the “Hamburg Corona Soforthilfe – Modul für innovative Startups (HCS InnoStartup)”:
1) Business operations are managed from a company’s headquarters or an existing significant business establishment in Hamburg
2) Maximum 50 employees (full-time equivalent on the cut-off date March 11, 2020)
3) Legal form of a corporation
4) The company must has been in existence for eight years maximum on April 15, 2020 (the date of entry in the Commercial Register applies)
5) Not majority owned (more than 50 per cent of the shares or voting rights) by another company (except investment vehicles, which are fully owned by an indirect shareholder/founder)
6) Has already received funding as part of the “Hamburger Corona Soforthilfe” (HCS) programme
7) Business model based on innovative, in-house development carried out by the company
8) One of the following conditions:
(a) has raised equity capital in the form of open participations or convertible loans, which provide for conversion into an open participation to EUR 10,000 minimum externally before April 15, 2020
or
b) has received at least one state subsidy of EUR 10,000 minimum for innovative start-ups before April 15, 2020 (e.g. EXIST, InnoFounder, InnoRampUp, Innovationsstarter Fonds Hamburg and High-Tech Gründerfonds).

Restrictions

Companies that were in difficulties on December 31, 2019 pursuant to Article 2 No 18 of the General Tax Code 1 are not eligible to apply. Public enterprises are excluded from the subsidy. The applicant must confirm economic difficulties experienced caused by the corona crisis after March 11, 2020 and which are now threatening its continued business existence.
The subsidy is granted as a lump sum, conditionally repayable grant.

The amount of the subsidy depends on the number of employees in full-time equivalents (FTE):
1 to 2 employees (FTE) € 12,500.
more than 2 to 5 employees (FTE) € 25,000.
more than 5 to 10 employees (FTE) € 50,000.
more than 10 to 50 employees (FTE) € 100,000

Applications now possible

Managing partners count as employees. Part-time employees are to count as full-time employees. The “Hamburg Corona Soforthilfe – Module innovative Start-ups (HCS InnoStartup)”:https://www.ifbhh.de can be used in addition to the Hamburg Emergency Aid (HCS). Cumulation with other state grants, including from state support programmes, which are granted on the basis of the “Bundesregelung Kleinbeihilfen 2020” (Federal Regulation on Small Grants 2020) dated March 24, 2020 and the “Geänderte Bundesregelung Kleinbeihilfen vom 2020” (Amended Federal Regulation on Small Grants 2020) is also possible up to the maximum amounts outlined in the “Bundesregelung Kleinbeihilfen 2020”.
The funding applies from April 20, 2020 and is limited until the deadline of May 31, 2020. Applications can be submitted until that date on: www.ifbhh.de.
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