A breath of fresh air…
At the height of the pandemic, the measure helped to prevent cascading bankruptcies and layoffs in the most severely affected sectors, such as transport, tourism, events, and many others. Covid loans played their role as a crisis buffer by providing fresh, interest-free, and immediately accessible funds. Companies facing cash flow difficulties were thus able to receive sums up to 10% of their turnover, with a cap set at 20 million.
…but not without conditions
To prevent abuse, the scheme was accompanied from the outset by several restrictive provisions. For example, any company benefiting from this support was prohibited from paying dividends to its shareholders until the loan had been fully repaid. Similarly, a company within a group could be refused the loan if one of its subsidiaries was simultaneously developing new projects. The application of these rules, alongside strengthened controls, led to the filing of complaints and the issuance of convictions. In many cases, these breaches stemmed from ignorance rather than intent: 219 companies that had received Covid loans were reported for having paid dividends to shareholders. Nevertheless, the measure fulfilled its purpose by allowing the Swiss economy to recover without sustaining excessive damage.
