27 March 2020

Important Questions and Answers on the Bridging Loans

From 26 March 2020, numerous banks are providing bridging loans for Swiss companies that meet certain minimum criteria and have run into liquidity bottlenecks due to the COVID-19 pandemic. The loans will be secured by the federal government by means of joint and several sureties. The programme was developed jointly by the federal government and the banks and totals CHF 20 billion. The Federal Council put the corresponding COVID-19 Joint and Several Surety Ordinance into force on 26 March 2020. Companies can apply for appropriate bridging assistance from this date – preferably from their principal bank.

The bridging loans are intended to provide Swiss SMEs – i.e. companies with a turnover threshold of up to CHF 500 million – with sufficient liquidity to enable them to cover their current fixed costs such as wages, rents and trade payables despite Corona-related revenue losses.

The programme offers companies basically two types of loans:

  • COVID-19-Credit: Loans of up to CHF 500,000, 100% guaranteed by the federal government (via existing surety organisations) by means of a joint and several surety. These loans should be paid out by the banks quickly and unbureaucratically.
  • COVID-19-Credit Plus: Loans from CHF 500,000 up to CHF 20 million, 85% of which are guaranteed by the federal government (via existing surety organisations) by means of a joint and several surety. These loans are subject to a credit check by the bank, as is customary in the industry.

In principle, for each company a maximum amount of CHF 20 million is available from a COVID-19-Credit and a COVID-19-Credit Plus.

The bridging assistance provided by the federal government is simple and pragmatic and builds on the existing structures of their surety organisations. Nevertheless, in practice certain questions arise, some of them delicate. For which companies is the programme suitable and for which not? How do the bridging loans affect entrepreneurial freedom? Can companies that were already in financial difficulty before the COVID-19 crisis also receive bridging loans? What effect do the loans have on the company's balance sheet?

For these and many other questions we have prepared a Q&A.

Naturally, the members of the Banking and Finance team will be happy to answer in person any questions you may have on this topic at any time.

Authors: Stefan Grieder, Adrian Dörig, Jana Essebier, Seraina Jenny-Tsering

Topics: Capital MarketsPandemicCoronavirusFinancingBridging Loans


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