Act now before government aid arrives

What to do if there are no orders as a photographer? When boutique owners, coaches and caterers no longer make money because the corona pandemic is paralyzing public life and the ordered restrictions imposed by the state are already causing horrendous economic damage not only for the catering, hotel, entertainment, theater, cinemas, sports venues, caused all retail, etc.? What this affected self-employed can do now should be announced in advance in this article:

Legislators are already preparing loans that should primarily help the self-employed. However, entrepreneurs and freelancers can make preparations to provide an application faster. The self-employed should therefore draw up a liquidity plan that details exactly how much expenditure and income is and how long the savings will last. Account statements should be planned in advance for the coming weeks and months. For all of this to work, the self-employed should keep an eye on the expenditure and reduce it if necessary. Rent, leasing rates, monthly fees for mobile phone contracts and other fixed costs are items that should definitely be taken into account.

A short-term conversation with the landlord, especially In the case of commercial space rental contracts,  is advisable that the rent may be deferred. In addition, a call to the health insurance company can be useful which can reduce the contributions if it is voluntarily insured. In exceptional cases, contributions are temporarily set to zero but this only applies to voluntarily insured persons. In addition, you should consider contacting the tax office, requesting that the advance payments be reduced or omitted entirely. In any case, the self-employed should not simply suspend payments, but contact beforehand.

It is important to develop creatively and modern in every area. The current crisis shows how quickly an “old” business model can be used up in a few days if the advantages of the online market are not exploited. Therefore, every self-employed person should, if he or she does not already do so, develop and endeavor with regard to e-business. The pressure may also mean that new paths open up that were previously not thought of or thought possible. For example, photographers, insurance brokers, athletes and cooks could offer webinars, cultivate their personal brand using social media, develop digital products, e.g. consulting firms can offer e-webinars or e-consulting, including video conferencing from anywhere in the world.

But be careful when taking out loans!

Self-employed people who now want to apply for a bridging loan should check very carefully beforehand whether they absolutely and in any case need it to secure their livelihood. Because every loan (regardless of whether it is private, governmental or business) is of course bound to a quick repayment, sometimes with high interest etc. (the maturity is determined by the lender and not the borrower in need!) This means that the problems of the self-employed are only postponed for a short period of time and repayments or deferrals become due after a short time, so that the self-employed then have to have more financial means in an even shorter period of time. This is particularly dangerous, so this should only be done in an absolutely inevitable emergency for the self-employed or his or her company.

The self-employed should not wait until the relief measures actually arrive, but may also consider applying for ALG I, provided that unemployment insurance is available. A self-employed person should do this if they already know that the lack of orders will continue for some time (a few months). Those who are not sure of this and assume that they can get there with the current means should wait a few more days before applying.

Self-employed persons without unemployment insurance can apply for ALG II directly. The prerequisites for this should be relaxed. In addition, those affected should check whether other benefits, such as housing benefit, are eligible.

If you need advice or representation, please contact our lawyer.