On the German government’s coronacrisis support for small businesses

Back in March, when the coronavirus pandemic started pummeling Europe for real, the German government announced a massive financial relief package for businesses. Among the measures were big bailouts for big industry; salary subsidies for staff and easier access to cheap loans for SMEs. And, to my personal surprise, financial support of small businesses and even freelancers.

I say surprise because for the last decade or so I was set up either as a freelancer or, the last few years, as a company of one which I own and which employs me. And during that time, more often than not I had the feeling that I would fall through the cracks of any and all government schemes. I figured it’s the cost of doing business, of getting a relatively high degree of autonomy.

So here was a program that would help offset the risks and lost business for freelancers and small companies like my own? Given the huge uncertainties and risks, for the first time I felt seen in that sense, and decided to apply for government support in a way I would have never considered at any other time before given my relatively stable and privileged business situation.

For context — you can skip the details but they’re somewhat important here — in Berlin this program had two parts: a no questions asked, unconditional payment of 5K just to get all small businesses through the expected tough times; and a 9K federal support package for hard costs (Betriebskosten) which were not super clearly defined in the application at that time, at least as far as I could tell.

I applied while we were still stranded on previous trip we had started before the virus had reached Berlin, so I filled this out on my iPad in an airport hotel while we waited for an evacuation flight back home. To my huge surprise, this relief package wasn’t just put together within just a few weeks but the applications were processed and the funds paid out within something like 48 hours.

It was amazing, and gave me serious hope, and a weird feeling of just for once not falling through the cracks. It felt helpful, timely, and sensible — a word I don’t thing I’ve used for government programs very often before.

Shortly after, as more applications were being processed, clarifications started coming in. Among other things, it became clear that the salary of the business owner or managing director were both exempt from using those funds — even though both were also exempt from the other government support packages that specifically dealt with staff salaries.

(Maybe that makes sense for some contexts; maybe an enterprise CEO salary doesn’t have to come from a government relief package.)

For a company of one, or a freelancer, that salary is the company. Not being able to pay out the owner’s salary can be the difference between staying afloat and bankruptcy. Often it’s the only serious cost factor, especially for knowledge workers who otherwise mostly just rent a desk somewhere. In my case, because of the way my company is set up, I was barred from most of those relief programs.

(What was eligible for those funds were things like a car lease, due licensing fees for software, and some other hard costs. There might be some jobs where those things are major expenditures, but knowledge workers live a universe away from those being relevant factors.)

I asked for clarification on the situation, and waited.

Fast forward 4-5 months, I got my answers: That whole federal chunk of the relief package does not apply for my situation.

So now it’s clear that in fact the program wasn’t designed very well, at least not for knowledge workers.

I refunded the extra 9K in full, with a letter asking to at least make sure that in the evaluation of this program it’s noted that this completely misses the reality of the situation for cases like mine. It’s fine. I don’t mind, it almost feels like a relief.

It’s been a slow year business-wise, because of the pandemic; it’ll continue to be a challenging year. The organizations I work with are, like most, scrambling just to get on with their ongoing day to day work, so most of the longer-term research and strategy work tends to get postponed until someone on the inside has the mental bandwidth to engage with it.

And while I’d argue that now is an especially good time to adjust and align strategic goals to deal with these new levels of ongoing uncertainty and ambiguity, on a personal level I understand it well. I also am busy getting through the week and looking less at the next 3 years.

That said, I know I’ll be fine, and my company will be fine. I’ve been doing this for a long time, really for most of my life. Not having a full picture of the next 12-24 months or even beyond, not even in the somewhat fake-y self-assuring way of a written roadmap or spreadsheet or slide deck, is the most normal thing in the world for a small company or freelancer — especially one who like me works in rapidly evolving topics and contexts.

So I’ll take this as a reminder that I’ll still fall through the cracks of most government programs, that this corona crisis relief package mostly failed me and my peers.

Yet also, I know I’ll be fine.

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