At the media conference on 25 February 2020, the Federal Council presented the emergency ordinance for bridge loans. We explain all about these in this article

• Employer reserves now also for employee contributions
• Rent reduction
• New form for registering short-time working

Bridge loans for companies
The Federal Council has published its measures for bridge loans. It provides companies with the possibility to apply for 100% guaranteed loans up to CHF 500,000. Loans in excess of this amount, up to CHF 20 million, are 85% guaranteed.

Application
In principle, companies must apply for the loan at their primary bank (including PostFinance). You can find out whether your bank is involved on this website, which is updated regularly: https://covid19.easygov.swiss/banken/. Clients whose primary bank does not participate must first establish a banking relationship with one of the participating banks. Loan applications must be submitted by 31 July 2020 at the latest.

The process requires a Switzerland-wide standardised loan application to be completed and submitted. You will find the application from 26 March 2020 at 8 a.m. on the web page https://covid19.easygov.swiss/. At some banks, the loan application is also submitted directly from e-banking. We therefore recommend that you check your e-banking first. On the one hand, submitting the application through e-banking will speed up the process considerably and, on the other hand, the Swiss government’s site will probably be overloaded due to the numerous enquiries.

We also recommend carrying out the process electronically, as this enables faster processing. To find out where to send the signed and scanned PDF, please visit: https://covid19.easygov.swiss/en/. If in doubt, send the application by e-mail to your bank advisor.

To complete the application, you will need your VAT number, which all companies and self-employed persons have. You can look it up by going to https://www.uid.admin.ch/. Sole proprietorships are best advised to select the person search tab and enter the first and last name in the search field. You can obtain your VAT number by adding the digits VAT to your UID.

The banks are not obliged to grant loans to their customers and can also reject loan applications. Guarantees are issued by the four existing guarantee organisations, whose losses are borne by the Swiss government. Furthermore, companies must meet the following requirements for a positive loan application:

• The company must have been founded before 1 March 2020;
• It must be economically significantly affected by the pandemic in terms of its turnover;
• It must be financially sound and not be the subject of bankruptcy or composition proceedings.

For loans up to CHF 500,000, your bank can pay out the loan as soon as it reaches a positive decision and sends its decision to the guarantee organisation. It does not have to wait for a response from the guarantee organisation.

For higher loans, a more extensive assessment is planned and the loan will only be granted once the guarantee cooperative has signed the guarantee contract with the bank.

Loan amount
The loan amount is based on turnover and should not exceed 10% of annual turnover. In the case of start-ups or newly founded companies, the loan is granted on the basis of an estimate of turnover.

The 10% is based on an estimate by the Swiss government that companies can finance their fixed costs for approximately three months with this loan amount along with the other measures.

Term and interest
The loans are granted for a term of 5 years and, in cases of hardship, extended by two years to a maximum of 7years. However, the repayment modalities are a matter of negotiation between borrower and lender.

Up to CHF 500,000, the loans are interest-free. For higher loans, 0.5% interest is charged on the guaranteed portion of 85%. The interest rate for the remaining 15% is a matter of negotiation between the contracting parties.

The Swiss government reserves the right to adjust the interest rate annually to market conditions.

Restrictions
During the period of the joint and several guarantee, the loan received may only be used to cover current rental and material costs. Replacement investments are permitted, but expansion investments are not. The following in particular are excluded during the guarantee period:

• Distribution of dividends, royalties or reimbursement of capital contributions;
• The granting of loans or the refinancing of personal and shareholder loans structured as loans.

The overall aim of these provisions is to prevent the misappropriation of funds. False statements will be punished with fines.

Employer contribution reserves
The Federal Council has also decided that employers may temporarily use the employercontributionreserves they have accumulated to pay employee contributions to occupational pensions. This procedure has no influence on the calculation of wages. The employee contribution must still be deducted from the employee’s wage.

Rent reduction
According to the homeowners’ association, whether the governmental measures justify a rent reduction for business premises is uncharted legal territory and has not been clarified. The tenants’ association, on the other hand, relies on Art. 258; 259a et seq. of the CO, which guarantee the tenant a claim to a reduction of the rent while there is a defect in the rented property. According to the tenants’ association, during the governmental measures a rented property cannot be used for the contractual purpose (e.g. operation of a beauty salon) and thus there is a defect that justifies a reduction of the rent. The homeowners’ association, on the other hand, argues that a defect cannot be “generally valid”, but can only be relative to the rented property.

However, the rent should not be reduced on one’s own authority, otherwise one risks an early termination by the landlord. A first option for any entrepreneur is to request a respite from the landlord.

Since the situation is unusual for all parties involved and neither legal certainty nor precedents exist, we recommend a discussion between tenant and landlord.

New form for registering short-time working
A new form is available for the registration of short-time working due to the coronavirus. You can find it here

If you have any questions or need assistance with any of the individual points, please do not hesitate to contact us.

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