Guarantees help bridge liquidity bottlenecks
The lockdown in the wake of the coronavirus fight is causing financial difficulties for many SMEs. The federal government has held out the prospect of help. One way to bridge liquidity bottlenecks already exists: guarantees.
On March 13, the Federal Council approved a special guarantee regime to support SMEs in liquidity difficulties. As of now, up to 580 million Swiss francs in guaranteed bank loans are available. There are four guarantee cooperatives in Switzerland, three of them regional and one national guarantee organization for women:
- BG Center, guarantee cooperative for SMEs
- BG EAST-SOUTH, guarantee cooperative for SMEs
- Guarantee cooperative SAFFA, for women
- Cautionnement romand (Guarantee Western Switzerland)
These cooperatives guarantee loans of up to CHF 1 million. The conditions for a guarantee have been eased, and the federal government intends to cover the business audit costs and the risk premiums of the companies for the first guarantee year for new guarantees until the end of 2020. This means that the federal government will reimburse the guarantee organizations for the application review fees, and SMEs will thus not incur any costs for submitting an application.
Applications for guarantees can be submitted by companies from all sectors except agriculture. However, the following points should be noted:
- A guarantee requires a bank loan. Therefore, it is advisable to contact a financial institution first.
- All loans granted must be repaid in the end
- SMEs receive a guarantee decision as quickly as possible, usually within three weeks
- No appeal may be lodged against decisions.
The applications are to be sent directly to the guarantee cooperatives or also via https://www.easygov.swiss or https://kmu-buergschaften.ch.
