Switzerland on Friday doubled the size of its coronavirus emergency loan program to CHF 40 billion to head off a rash of insolvencies among small businesses strapped for cash.
The Federal Council asked parliament to approve CHF 10 billion of an additional CHF 20 billion in federal guarantees for bridge loans as a matter of urgency. Companies have taken out more than CHF 14 billion in state-backed bank loans in just over a week.
“Because of this considerable demand, the CHF 20 billion in federal guarantees is likely to be exceeded in the next few days,” the government said.
Finance Minister Ueli Maurer said some 400,000 small businesses are struggling with a cash crunch as a result of the pandemic. The vast majority are companies with fewer than 10 employees.
So far about 76,000 businesses have received credit under the program, part of Switzerland’s largest-ever economic aid package. Businesses can borrow up to CHF 20 million at low or zero interest and have five years to repay the debt.
The demand for liquidity has increased in the last two days, Maurer said.
Switzerland has closed schools and many businesses and banned gatherings of more than five people as it fights the outbreak. The death toll rose to 484 people from 432 people on Thursday, while the number of positive tests rose to 19,303.
“We haven’t reached the summit,” said Interior Minister Alain Berset at a news conference. Even when the numbers peak, there will be no sudden end to the crisis, he said, urging people to avoid unnecessary travel during the Easter holidays.
Swiss cantons are mobilizing more police ahead of the holidays to enforce the country’s coronavirus confinement measures.