Berlin sets up 252-million-euro energy aid for freelancers and SMEs

The money will be targeted to organisations who have seen a 50% rise in energy costs in 2022 compared to 2021

Yesterday, local authorities in Berlin announced they have earmarked 252 million euros as an energy hardship fund to help freelancers and small and medium-sized businesses (SMEs). The programme will provide immediate grants to help people meet their crushing energy bills.

This policy will be a social measure aimed at businesses and the self-employed, mirroring the energy aid scheme for households, announced in early January. Increasing energy costs can jeopardise business liquidity and can be absolutely burdensome for someone who is self-employed or for non-profit organisations.

According to a press statement, 200 million euros for the fund will come from Berlin’s state budget while the remaining 52 million – from the German Federal budget.

A high bar to enter

There are a couple of prerequisites that would qualify freelancers for the help and in some respects, they could be regarded as quite prohibitive. One of the requirements is an increase in energy costs of around 50% in 2022 compared to 2021.

Furthermore, local officials would need proof that the energy costs exceed 3% of the company’s sales in 2021. Also, applicants will have to show evidence that there is a negative cash flow situation due to energy prices.

The maximum grant is 300,000 euros while any expenses above that could be covered through a one-off subsidy that is supposed to fund 90% of that cost. In order to ensure quick access to the funds, the city will provide an advance payment scheme as soon as the candidate meets the criteria.