This is leading to severe revenue shortfalls at around 2.2 million companies – more than half of the German total – and has so far resulted in short-time work notices for 10 million employees. A prolonged lockdown or persistent loss of sales even after the restrictions have been relaxed, as is currently being done step by step by the federal states, can have existentially threatening consequences for many companies due to the associated withdrawal of liquidity. Dept-based liquidity assistance from the government may provide bridging aid, but it does not prevent companies from becoming overindebted as capital is depleted. However, subsidies are only granted by the federal government for micro-enterprises with up to 10 employees and only in small amounts up to a maximum of 15,000 euros.

In this critical situation, the good equity base that SMEs have built up over the past 20 years has a stabilising effect. Small companies and the German „Mittelstand”, which make up the majority of total companies, were able to improve their balance sheet structure the most. Although the solid capitalisation of German SMEs will not be able to prevent an increase in the number of insolvencies as a result of the crisis, on average it will act as a safeguard for their existence.