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Switzerland Opens COVID-19 Loan Guarantee Scheme For Start-Ups

Friday, May 15, 2020

The Swiss Government has opened the application process for a loan guarantee scheme aimed at helping start-ups facing liquidity problems during the coronavirus outbreak.

In March, the Federal Council announced that SMEs affected by the pandemic could apply to their banks for bridging credit facilities, and that the Confederation would guarantee a proportion of the loan. On April 22, the Council said that it would expand this system to provide support for start-ups.

Loan guarantee applications can be submitted by eligible start-ups from May 7 until August 31, 2020. The loan guarantee application must be submitted via a website and will be sent to the participating canton.

Under the scheme, 65 percent of the loan guarantee will be provided by the federal government and 35 percent will be provided by the relevant canton or by third parties appointed by the canton. This means that, together, the federal government and canton will jointly guarantee 100 percent of an amount of up to CHF1m per start-up company.

The total amount guaranteed may not exceed one-third of the start-up's 2019 running costs. However, cantons may deviate from this rule in their assessment of the start-up.