Half of interest-free Covid-19 loans to companies remain unused
Average use of loans was higher in sectors hit hard by the pandemic, such as tourism, events, hotels and catering.
Keystone / Jean-christophe Bott
Around 135,000 companies in Switzerland have taken advantage of the interest-free emergency loans but so far half of the money is still in their accounts.
The “Covid-19 refinancing facility” (CRF) was designed to provide cash-strapped companies with emergency borrowing to get through the pandemic. Loans of up to CHF500,000 ($510,000) have been made available free of interest, while firms pay 0.5% on larger loans of up to CHF20 million.
CRF comes to an end on Friday at midnight with the amount borrowed so far coming to CHF16.5 billion.
According to an estimate by Alexandre Prêtre of Swiss bank UBS, half of this amount is sitting unused in the bank accounts of the borrowers. Average use of loans in sectors hit hard by the pandemic, such as tourism, events, hotels and catering, were much higher than in IT or banking services, for example.
Demand for these emergency loans was also modest. Less than a quarter of the companies operating in Switzerland have made use of the CRF and barely 40% of the money set aside by the federal government has been paid out at the request of companies. This is probably because the Swiss economy was doing quite well before the crisis and in general companies had decent reserves and little debt.
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