How Small and Medium-sized Businesses can Effectively Access Governmental Support.
On May 25th, the AGBC Frankfurt hosted its second COVID-19 focused webinar titled “How Small and Medium-sized Businesses can Effectively Access Governmental Support." Thomas Leiser, AGBC VP of Programs, hosted the event using Zoom from his home in Gießen with special guests, Dr. Hermann Knott from his home in Cologne, and James J. Black at home in Washington, D.C.
Following introductions by Mr. Leiser, Dr. Hermann Knott, a Partner with Andersen Tax and Law in Cologne, began by saying “The devil is in the details; and unfortunately, there is more than one devil.” Mr. Knott, an expert on M&A and infrastructure, outlined many of the details of the various programs available to different sized companies in Germany. He emphasized that the programs are largely operating well, and that can at least partially be attributed to an established system of support in Germany. He said “There is already protection in Germany under a state system.”
James J. Black, a lawyer with Morrison & Foerster LLP in Washington, D.C. and also a M&A specialist, spoke in some detail about the several programs in the US including CARES Act (The Coronavirus Aid, Relief and Economic Security Act), the Main Street Lending Program, and the PPP (the Paycheck Protection Program). He emphasized that even after two months, the CARES Act and Main Street Lending Program “…are not operational.” He added that “…They are a challenge for the administration to get into effect.”
Mr. Black went into further detail about the very popular PPP program and said $510B of the current $660B has already been lent-out, and the US government is actively trying to change the restrictions on this program to make it easier for businesses to use the money and survive beyond the original 8 week end-date.
Dr. Knott and Mr. Black spoke about enforcement of restrictions and the backlash some well funded companies, including the LA Lakers, received for applying for support. Mr. Knott said, “In Germany, there is no negative impact on a company’s reputation to ask to participate in programs.” He referred again to the long-standing state support of entities. Mr. Black said “There is no negative impact in general, except for companies which have a lot of money. It’s okay for companies that need the money.”