May 19, 2020

Swiss liquidity support for startups

Description of the core change(s) brought by this policy instrument

Prior to this loan guarantee scheme for startups, specific business models had only been included to a limited extent in Federal Council measures. For them, access to the Confederation's existing emergency aid was either not possible or very restricted. Certain cantons had subsequently introduced supplementary measures. However, owing to the withdrawal of some investors and the resulting delays or cancellations of funding rounds, the Federal Council announced further action was necessary. Therefore, the Federal Council has examined ways in which coronavirus-related insolvency can be avoided at promising start-ups.

In collaboration with the cantons, the federal government thus began offering promising start-ups immediate protection against insolvency as a result of the coronavirus.

This special guarantee procedure helps start-ups secure bank loans, as follows:

  • The federal government and the canton (or third party) jointly guarantee 100% of an amount of up to CHF 1 million per startup company.
  • 65% of the loan guarantee is provided by the federal government and 35% is provided by the canton or third parties appointed by the canton.
  • The total amount guaranteed may not exceed one third of the startup’s 2019 running costs. In justified cases, the canton may deviate from this in its evaluation.
Please list the implementing agencies

The government-accredited loan guarantee organisations facilitate access to bank loans for startups.


Please name the policy advisor(s) or leader(s) who have been key in introducing and/or designing this policy instrument

Martin Godel, Head of SME Policy, State Secretariat for Economic Affairs SECO.

Lifecycle of target firms for this policy instrument
Startup firms
If you marked "start-up" and/or "scale-up" firms, please provide the specific definitions used

Which companies are eligible?
• Startups based in a participating canton and founded after 1 January 2010 but before 1 March 2020.
• Companies limited by shares (AG) and companies with limited liability (GmbH) based in Switzerland.
• Startups that are not part of the agricultural sector.
• The startup is not in bankruptcy or composition proceedings or in liquidation
• Startups that are suffering significant financial and liquidity problems due to the COVID-19 pandemic.

What information is required?
• Current expenses. In particular, current expenses comprise wages, investment that is not eligible for capitalisation, rents, costs of patent applications and patent lawyers as well as costs for internal or outsourced research and development processes.
• Annual financial statements as evidence of current expenses in 2019 or, if not available, in 2018
• Business plans
• Company details, including contact details of a contact at the company.
• Details of the lending bank.
• Loan agreement and/or loan applications for any loans received in accordance with the COVID-19 Joint and Several Loan Guarantee Ordinance (COVID-19-Solidarbürgschaftsverordnung) of 25 March 2020

Additional requirements
• The startup will confirm that it is not insolvent pursuant to Art. 725 CO at the date it submits the application.
• The business model is scalable, science- or technology-based and innovative.
• Any loans pursuant to the COVID-19 Joint and Several Loan Guarantee Ordinance (COVID-19-Solidarbürgschaftsverordnung) of 25 March 2020 will be included.
• The loan guarantee organisation will decide on the guarantee, taking account of the canton’s assessment. On this basis, the company can apply for a loan with any bank.

Support offered
Direct Financial Support
Level of intervention
Barrier(s) addressed with this policy tool
Access to Capital
Abstract summary of this Policy resource

The Federal Council provides a guarantee scheme to support promising startups encountering liquidity problems caused by the coronavirus.

Policy timeline

Policy approval: The Federal Council decided on the need of this scheme on April 22, 2020. By leveraging the existing system of guarantees for SMEs to provide support for start-ups, the scheme was in place by April 30, 2020. 

Application period: Loan guarantee applications can be submitted from May 7, 2020 up to August 31, 2020.

Challenges, criticisms and lessons

Swift implementation: Given the urgency, the Federal Council decided to use the existing system of guarantees for SMEs to provide support for start-ups. This approach allowed the government to implement this policy instrument without the need for a time-consuming legislative amendment.

Geographic scope