Due to the COVID-19 crisis, many companies have run into liquidity bottlenecks. With government-backed COVID-19 loans, Switzerland provides companies with uncomplicated access to bank loans. However, the use of these loans also entails some restrictions.
Comparison of the two COVID-19 loans
There are two types of COVID-19 loan available to companies. The primary difference between the two relates to the volume. Common to both loan types is the calculation of the maximum amount, which may not exceed 10% of the annual turnover for 2019. If neither definitive nor provisional turnover figures for 2019 are available, the annual turnover for 2018 must be taken as a basis, or three times the annual net salary total if the company was founded after 1 January 2019. The maximum amount is CHF 20 million.
|Loans up to CHF 500,000||Loans from CHF 500,000 to CHF 20 million|
|Credit check||No||Simplified credit check by the bank|
|Payout||The payout usually takes place within hours or at least within a few days||Due to the required credit check, the payout takes place after a few days at the earliest, but usually only after a few weeks|
|Federal guarantee||Federal guarantee: 100%||Federal guarantee: 85%|
|Interest||0%||Amount guaranteed by the federal government (85%): 0.5%
Remaining amount (15%): as governed by individual loan agreement
|Duration||Maximum of 5 years, extension by 2 years possible|
To receive a COVID-19-loan, the company must meet the following requirements:
- established before 1 March 2020
- sales revenue in 2019 of max. CHF 500 million
- not in bankruptcy or composition proceedings or in liquidation at the time of filing
- significant economic impact due to the COVID-19 pandemic, particularly in terms of turnover
- no liquidity protection received based on the regulations in the areas of sport or culture
In order to receive such loans, it is therefore particularly important that the applicant is significantly affected by the pandemic; not every company is automatically eligible.
Restrictions during the term of the loan
If the conditions for obtaining a loan are met, the company must be aware of the extensive restrictions that apply during the term of the loan. As long as the loan has not been repaid the following activities are prohibited:
- making new investments in fixed assets that are not replacement investments
- distributing dividends and royalties and reimbursing capital contributions
- granting loans or refinancing personal and shareholder loans in the form of loans, with the exception of refinancing overdrafts accumulated since 23 March 2020 at the bank granting the loan guaranteed under the regulations
- repaying group loans
- transferring credit funds secured by a joint and several guarantee under the Ordinance to a group company directly or indirectly affiliated with the applicant which is not domiciled in Switzerland
This means that if a company wishes to distribute a dividend after receiving the loan, the loan would have to be repaid before the dividend is paid. Furthermore, the question arises in particular as to how to deal in practice with the ban on transferring received credit funds to foreign group companies if a company has already regularly granted loans to foreign companies in the past. It could be argued that it is not the COVID-19 loan being transferred, but other already existing funds. Especially companies with foreign group companies will need to explore in detail how these restrictions affect the use of funds.