The ongoing corona crisis is threatening the existence of companies in virtually all sectors. In addition to the funding instruments provided by the Kreditanstalt für Wiederaufbau (KfW) and other local state banks, the federal and regional governments have announced further programmes intended to provide short-term support for the German economy.
As well as ensuring they meet the formal conditions for receiving state aid, it is absolutely essential for companies to adjust their planning on a continuous basis and to monitor their cash flow and capital requirements closely. Automated rating procedures by lending banks and breaches of the covenants attached to loans mean that the reporting obligations with which distressed entities are faced will increase in the near future. Plausible, verifiable cash flow planning is a vital formal component of applications for existing state aid, and for any other programme that may be added in future. It becomes even more important in the context of the particular risks that arise if an entity is “borderline insolvent”. Cash flow planning is the only way to judge whether the conditions for suspending the obligation to declare insolvency are met, for one thing. The other is that it makes it possible to avoid risks under criminal and civil law, D&O liability and financing risks.
Our teams of experts are available to advise you on all matters relating to business plans and do support to calculate your short- and longer-term liquidity and capital requirements. This enables us to make a key contribution to fulfilling even more demanding reporting obligations and to obtaining state aid.
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