Coronavirus: Support programme for businesses to start earlier
Businesses that have been forced by coronavirus into a cash squeeze that is threatening their survival can apply for bridging loans with a guarantee from the canton. The Government has enacted an ordinance that enables immediate action. Business are asked to contact their main bank. Applications can be made to Basler Kantonalbank from 25 March 2020. The canton will provide ongoing information as soon as other banks join. Help is urgently required as many businesses are being immediately and directly affected by the crisis. The Government had originally assumed that the support programme could begin on 1 May 2020.
The step of granting bridging loans enables guarantees of up to a total of 50 million francs. In addition, the Government has enacted the new ordinance on granting of guarantees in connection with the COVID-19 virus. It ensures that processing of loan and guarantee requests is as straightforward as possible: Struggling businesses apply for a loan from their main bank. Applications can be made to Basler Kantonalbank from 25 March 2020. The canton will provide ongoing information as soon as other banks join.
Businesses whose headquarters are in the Canton of Basel-Stadt are eligible. The cash squeeze that is threatening the business’ existence must have been caused by the outbreak of the COVID-19 virus. Applications can be submitted during the period from 25 March 2020 until 31 July 2020. The conditions for being granted a loan and the terms of the loans are basically in accordance with the terms of the respective bank. However, it is expected that the participating banks will waive additional risk premiums and offer the loan at favourable conditions, because of the cantonal guarantee.
Cancellation of events, the drastic reduction in purchases of non-food items, the lack of tourists, etc. are causing businesses to lose income, which could lead to cash flow problems and therefore ultimately to a loss of previously productive employment. This situation necessitates urgent assistance, especially for stabilising the solvency of these businesses. The aim is, if possible, to prevent an economic downward spiral with redundancies. The Government had therefore already assured businesses of support with a package of measures on 11 March. In addition to bridging loans with state guarantee, it also planned to set up a crisis fund and for longer payment periods for state payments. (See: https://www.coronavirus.bs.ch/en/newsticker-en/11.03.2020-1000-unterstuetzung-fuer-baselstaedtische-unternehmen-im-zusammenhang-mit-dem-coronavirus.html) The Federal Council passed a package of measures aimed at mitigating the economic consequences, on 20 March 2020. The cantonal measures will supplement these measures.