Coronavirus: ceiling for distressed SMEs increased

Part of the Federal Council's transition strategy is that the extraordinary cushioning measures for companies should gradually be phased out and the ordinary and proven instruments should be used again (normalisation). The exchange with the cantons has shown that the hardship assistance currently available is sufficient for the majority of companies. However, the cantons point out that individual companies need additional support. The companies most affected are those that have already been suffering from the pandemic for a long time and are currently reaching the upper limits of hardship assistance, or large companies with special structures.

Cushioning the transition to normality

After consulting the cantons, social partners and industry associations as well as the two economic commissions, the Federal Council decided on two final selective adjustments to the Hardship Cases Ordinance in order to avoid an abrupt expiry of aid and to cushion the transition to normality for these companies:

Increase Ceiling: The upper limit for A-fund-perdu contributions will be increased from 20 to 30 percent of annual turnover and a maximum of CHF 1.5 million for companies with annual turnover of up to CHF 5 million that show a decline in turnover of more than 70 percent. Thus, analogous to the companies with an annual turnover of more than CHF 5 million, a "hardship case rule" is also created for the smaller companies.

Allocation of the federal reserve: Based on Article 12(2) of the Covid 19 Act, the Federal Council may make additional contributions to cantonal hardship measures for particularly affected cantons without the cantons contributing financially to these contributions. CHF 1 billion has been reserved for this so-called "Federal Council reserve". The Federal Council has decided to allocate an initial tranche of 300 million to the cantons so that they can take account of the specific needs of companies in their canton. In using these additional contributions from the Confederation, the cantons are allowed to deviate from individual provisions of the Hardship Ordinance. In particular, they have greater leeway in determining the upper limits and the assessment of the assistance. In addition, they have the option of using the additional federal contributions to finance advance payments made between 1 March 2020 and 25 September 2020. Likewise, they can support companies that have already received industry-specific Covid 19 financial assistance. However, this is only the case if the previous financial assistance was less than a hardship grant under previous law. It is left to the cantons to decide how they wish to use the additional contributions within the current legal framework.  

The introduction of the "hardship case rule" for small businesses with an annual turnover of up to CHF 5 million should result in additional expenditure of no more than CHF 500 million. This amount, as well as the allocation of the CHF 300 million of the Federal Council reserve, can be financed by the existing and already approved credits. (Federal press release)

The cantonal contact details and statistics on implementation are available on https://covid19.easygov.swiss/haertefaelle/ available.