The first few days have shown that the COVID-19 bridging credit facilities are addressing a great need and that the quick and unbureaucratic processing via banks and PostFinance is working well. As at 2 April 2020, 76,034 credit agreements with an estimated volume totalling CHF 14.3 billion had been concluded.

Because of this considerable demand, the CHF 20 billion in federal guarantees is likely to be exceeded in the next few days. The Federal Council is thus asking Parliament to expand the guarantee credit programme and increase the maximum volume of guarantees from CHF 20 billion to a total of CHF 40 billion. CHF 10 billion of this sum is being requested as a matter of urgency to the Finance Delegation, which will meet on 7 April 2020.

The Federal Council is generally assuming that the aid credits are not being abused. Nevertheless, there is a certain potential for abuse with the unbureaucratic granting of credits. The Federal Council is determined to counteract this. It instructed the competent departments today to rapidly implement an anti-abuse concept, which contains the following measures in particular:

The central unit of the guarantee organisations checks all COVID-19 credit agreements for compliance with fundamental prerequisites, as well as for multiple credit claims. Unwarranted or multiple credit applications will quickly be revoked.
Furthermore, COVID-19 credits are systematically reviewed by linking VAT and other data, for instance to check the turnover details provided by companies and track any discrepancies.
The FDF has also been instructed to promptly provide the Federal Council with possible options for tightening the criminal and/or liability provisions in the Joint and Several Guarantee Ordinance. It should be possible to prosecute not only the companies applying for credit, but also their governing bodies, and thus the individuals behind them.

On 20 March 2020, the Federal Council presented a comprehensive package of measures to cushion the economic impact of the coronavirus pandemic. Since 26 March 2020, banks and PostFinance have been providing liquidity to affected companies in the form of bridging credits, so that they can cover their current overheads despite turnover reductions associated with the new coronavirus. Credits of up to CHF 500,000 are fully secured by the Confederation, and credits of between CHF 500,000 and CHF 20 million are secured by the Confederation to 85% of their value. The Federal Council believes that this instrument will help small and medium-sized enterprises to get through this difficult phase in a targeted manner without non-repayable contributions from the Confederation. Companies that need liquidity can obtain it and repay the corresponding loan over a five-year period.

Federal Council increases volume of liquidity assistance guarantees to CHF 40 billion