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Switzerland Extends COVID-19 Guarantee Scheme To Start-Ups

by Ulrika Lomas, Tax-News.com, Brussels

01 May 2020


The Swiss Federal Council has announced that it will expand a system of guarantees for SMEs to provide support for start-ups during the coronavirus pandemic.

In March, the Federal Council announced that SMEs affected by the pandemic could apply to their banks for bridging credit facilities representing a maximum of 10 percent of their annual turnover and no more than CHF20m. Credits of up to CHF500,000 will be fully secured by the Confederation and zero interest will be charged. Bridging credits that exceed CHF500,000 will be secured by the Confederation to 85 percent of their value. The interest rate on these credits is currently 0.5 percent on the loan secured by the Confederation.

Companies with a turnover of more than CHF500m are not covered by this program.

On April 22, the Federal Council said that it will use this existing system of guarantees for SMEs to provide support for start-ups. It plans to create a new procedure for start-ups under the scheme by April 30.

The Confederation will guarantee 65 percent of a credit, and the cantons will guarantee the remaining 35 percent. It will be up to individual cantons to decide whether they wish to offer this guarantee facility to start-ups. If a canton decides to offer this measure, start-ups will be able to submit a guarantee application to the relevant cantonal office by August 31.

The State Secretariat for Economic Affairs, in consultation with interested cantons and the guarantee organizations, will by April 30 draw up the practical criteria for using the scheme. It will publish a list of participating cantons and relevant offices, as well as further details on the procedure.

TAGS: small business | business | interest | small and medium-sized enterprises (SME) | Switzerland | micro business

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