Guarantee scheme for technology start-ups begins
Today the Government approved Ordinance 2 concerning granting of cantonal start-up guarantees as a result of the COVID-19 pandemic. It will come into force on 1 December 2020. With it, the Government enables a guarantee scheme that is specifically tailored to the needs of science and technology-based start-ups. The scheme will run until the end of 2021. The canton’s partners are the Eckenstein-Geigy-Stiftung foundation and Basler Kantonalbank (BKB).
From 1 December 2020, the Canton of Basel-Stadt will be able to guarantee subordinated loans to technology start-ups at 90% and up to 40 million francs. The most important prerequisite is proof of economic damage because of the consequences of COVID-19. The Government has approved the corresponding ordinance. It is based on the Economic Development Law [Standortförderungsgesetz] that was partially revised in June 2020. The canton’s partners are Basler Kantonalbank (BKB) and - for the first tranche of 10 million francs - the Eckenstein-Geigy-Stiftung in Basel. BKB grants the start-ups subordinated loans; the Eckenstein-Geigy-Stiftung guarantees the remaining 10% of the loans. The canton is open to cooperation with other guarantors and/or commercial banks that are active in the Canton of Basel-Stadt.
Start-ups that satisfy the conditions of the scheme can submit applications to the Canton of Basel-Stadt by email from 14 December 2020. All of the necessary information and documents will be available on the website of the Department of Economic, Social and Environmental Affairs (WSU) from this time. Applications can be submitted until 31. December 2021 at the latest. Applications will be closely examined as part of the Basel-Stadt scheme. The canton will be working together with Innosuisse experts, as well as with experts from Basel venture capital funds, among others.
The canton and the Eckenstein-Geigy-Stiftung will be able to share in the profits of the start-ups if they are later successful, on the basis of granting warrants (share options). This profit sharing is intended to compensate for any financial losses incurred by the canton and the foundation as a result of providing these guarantees. The WSU is responsible for preparing and processing the guarantees, while the guarantees are granted by the Government. The foundation does not participate in awarding the guarantees.
With this new scheme, the Government is convinced that it can make an effective contribution to securing livelihoods in the medium term and to the growth of science and technology-based start-ups in the Canton of Basel-Stadt.