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Information for companies

Information for companies

A large segment of the Swiss economy consists of small and medium-sized enterprises (SMEs). Accounting for 99.7% of all companies in Switzerland and employing 67.2% of the workforce, SMEs are the backbone of the Swiss economy. Read on to learn more about the services that banks offer these companies and, in particular, about SME financing.

Banking services for SMEs

Banks offer a comprehensive range of services tailored to corporate customers. These range from support for payment transactions and corporate financing to succession planning and pension-related matters. The below chart outlines the key services offered by banks.

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COVID-19 loans

During the COVID-19 pandemic, banks swiftly started lending to SMEs, thereby making an important contribution to the economy. The SME lending programme ran from 26 March 2020 to 31 July 2020. Information about the pandemic-related support offered by banks can be found here.

Tips on how to finance your company

Tip 1: Regularly plan and optimise your finances

In order for a business to remain successful over the long term, it is necessary to identify the appropriate financing for each project and phase of the business. Liquidity planning provides an overview of available and planned liquidity. Excess cash can be used to repay loans or be invested, and financing shortfalls can be covered through loans or leasing.

Tip 2: Draw up a professional business plan

Your business plan plays a key role in determining whether you receive financing. It contains key figures and serves as a basis for communicating with your business partners, investors and the bank. The Business Navigator is a professional tool that can assist you in preparing your business plan. 

Tip 3: Use checklists

Both applicants and banks want the loan application process to be swift and smooth. Incomplete documentation can cause aggravation and delays, so checklists are a helpful option that should be taken advantage of.

Tip 4: Reduce the cost of risk

The cost of risk can be managed or reduced through measures such as pledging securities, life insurance policies or real estate.

Tip 5: Communicate openly

The more information the bank receives, the better it can assess the risks associated with a loan. This makes the bank’s decision about whether to grant a loan easier and can in some cases result in better terms and conditions.

Tip 6: Improve your rating

The annual creditworthiness review conducted by banks gives SMEs the opportunity to improve their credit rating. The following documents make this a relatively straightforward process: business plans containing detailed figures, presentations regarding upcoming projects, detailed information about the current and future development of the company and its strategic direction.

What do I need to know about financing?

Various financing options exist in Switzerland. The “house bank model” is the most common. This is based on a long-standing relationship between the bank and the customer and is one reason that bank loans granted for a range of purposes are the most important source of financing for most Swiss companies. Other financing instruments, such as leasing, factoring, trade finance and financing via the capital market, are also available.

Working capital financing

Working capital financing ensures the liquidity of your company and is generally used to finance all types of goods required for production or trade. It primarily consists of short and medium-term debt financing instruments, such as overdraft facilities.

Investment capital financing

Investment capital financing is a longer-term form of financing, for example for machines, parcels of land or product development.

Export finance

Export finance is sought when exporters require additional liquidity, or their international buyers require that collateral be provided. It is used to hedge risks and comprises supplier, buyer and manufacturing loans.

Real estate financing

Real estate financing provides long-term financing for commercial real estate. The products offered are the same as for private clients.

Leasing

Leasing differs from purchasing in that the product (most commonly industrial plants and capital goods, e.g. machines, technical equipment, vehicles) is purchased by the leasing company and made available to the lessee to use at their discretion for a defined period of time (without a transfer of ownership). The advantage of this mid to long-term form of financing for investments is that since the lessee is only required to make a monthly payment, it does not tie up as much liquidity.

Factoring

Factoring is a form of financing that provides companies with (short-term) liquidity. Short-term (nominal) trade receivables are sold to a factoring company. When the invoice is paid, the factoring company charges a factoring fee for their service, calculated based on the interest charge for the liquidity provided and the default risk.

Your direct contacts can provide you with an overview of concrete offerings and terms and conditions in this area.

Links

Swiss association for SMEs

www.kmuverband.ch (in French, German and Italian only)

Swiss Trade Association

www.sgv-usam.ch

SECO SME portal

www.kmu.admin.ch

Platforms for matters relating to company succession

www.kmunext.ch (in German only)

Business Monitor S-GE

https://business-navigator.s-ge.com/

Support for the export sector

Swiss Export Risk Insurance SERV: www.serv-ch.com
Promotion of exports from Switzerland: www.s-ge.com

Loan guarantee cooperatives

BG Mitte, Bürgschaftsgenossenschaft für KMU www.bgm-ccc.ch (in French and German only)
BG Ost, Bürgschaftsgenossenschaft für KMU www.bgost.ch (in Italian and German only)
Coopérative romande de cautionnement - PME (CRC-PME) (in French and German only) www.cautionnementromand.ch
Bürgschaftsgenossenschaft von Frauen für Frauen www.saffa.ch (in French and German only) 

Venture capital

The Swiss Private Equity & Corporate Finance Association (SECA) www.seca.ch
Foundation for technological innovation www.sti-stiftung.ch
Swiss Venture Club (in German only) www.svc.swiss
«venture» www.venture.ch