On March 25th 2020, the Federal Council announced the introduction of a loan programme for small and medium-sized Swiss enterprises. This includes sole proprietorships, partnerships and legal entities that are established before 1st March, 2020. This COVID-19 Swiss SME loan programme took effect from March 26th, 2020.
The COVID-19 Swiss SME loan programme is a joint initiative between the Federal government, the Swiss National Bank and the other Swiss banks to ensure that companies facing liquidity problems as a result of the COVID-19 pandemic have access to bridging business loans.
Two Types Of COVID-19 Swiss SME Loans
Under the COVID-19 Swiss SME loan programme, each enterprise meeting the eligibility criteria may apply for a loan on a website maintained by the Swiss Federal government. There are two types of loans which both have a duration of 5 years.
The first option is the COVID-19 Loan up which is up to an amount of CHF 500,000 at 0 % interest for immediate liquidity needs. The second option on the Swiss business loan programme is the COVID-19 Loan PLUS which is up to an amount of CHF 20 Million at 0.5% for the 85% covered by the Government Guarantee and the individual bankrate for the remaining non-guaranteed 15%. The COVID-19 Loan PLUS is available for companies whose liquidity exceeds the threshold for the standard COVID-19 Loan. The COVID-19 Loan benefits from a 100% Federal government guarantee via the Federal Surety Organizations. Whereby, the COVID-19 Loan PLUS benefits from a 85% Federal government guarantee.
COVID-19 Swiss SME Loans Involve Commitment
When Swiss SMEs are applying for the COVID-19 Loan or COVID-19 Loan PLUS, they have to provide certain assurances and commitments covering issues such as insolvency, prepayment of shareholders or third party loans, payment of dividends and expansionary capital investment plans in order to obtain the loans.
The COVID-19 Swiss SME loan programme has been extremely successful so far, disbursing over CHF 15 Billion of funds to over 76,000 businesses in just the first week of its launch.
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