• Philipp Zünd, Partner |

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

Sole proprietorships, partnerships and legal entities domiciled in Switzerland can apply for these loans from 123 Swiss banks.


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.


Anyone who obtains such a loan deliberately based on false information or fails to comply with the above-mentioned restrictions on the use of funds may be fined up to CHF 100,000.

In view of the fact that these loans are simply obtained (at least up to the amount of CHF 500,000), there is a certain risk of abuse. Against this background, the Federal Council has instructed the Federal Department of Finance to examine options for reviewing the criminal and/or liability provisions. In particular, there is the possibility that, under certain conditions, corporate bodies may also be prosecuted in the event of an abusive application for credit or use of funds.

In practice, fines will probably only be imposed if the loan cannot be repaid in the future. In this case, it should be checked whether the information in the application was correct and whether the funds are also being used in accordance with the restrictions mentioned. If this proves not to be the case, fines could be levied and liability risks of corporate bodies would continue to exist (after a possible tightening of these provisions).

Practical experience

As of the end of April 2020, around 111,000 loans of up to CHF 500,000 had already been granted in the total amount of around CHF 16.4 billion. Larger loans had been granted less frequently as of this date (around 66 loans with a total volume of around CHF 150 million).

One conclusion to be drawn from this is that the smaller loans, which do not require a credit check, are very easily available. In contrast, banks carry out a serious credit check for the larger loans and bear 15% of the risk themselves. In some cases, shareholder guarantees or other securities are also required.


The number of loan applications and the total amount of loans granted show that, through this financial support, the Federal Council has recognized the needs of the Swiss economy, particularly of the small and medium-sized enterprises. The rapid and – at least for amounts of up to CHF 500,000 –straightforward granting of loans provides companies with liquidity to cope with the current situation.

At the same time, it is important that the unbureaucratic process does not push the associated terms and conditions into the background. In this context, it should be pointed out that disregarding the requirements can lead to (criminal) legal consequences.

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