Small Businesses are the lifeline of the economy. While national governments have stepped in to help business owners survive the corona induced havoc, the way these loans are being dispersed, through the banks, means a majority of small businesses will never be approved.  Most governments are requiring the banks to take up to 20% of the losses on themselves and the banks being risk averse, especially during the current crisis are simply denying most of the applicants.

Luckily for businesses located in Switzerland and France their governments are guaranteeing 100% of all loan losses.

The US Congress passed the largest stimulus package of $ 2 trillion to stabalize the economy.

As part of the CARES Act, Congress allocated $349 billion to small business (SMEs) but the full amount has run out as of April 16, 2020.  Under the CARES Act, SMEs received assistance via the Pay check Protection Program which guarantees loans up to $10 million with loans being forgiven if the business keeps their employees on the payroll, at their normal salary for eight weeks.

In addition, the US Small Business Administration is providing working capital loans of up to $2 million with no personal guarantees required on loans under $200,000.

The UK Government has pledged £330 billion ($410 billion) of loans for the UK’s SMEs under the Coronavirus Business Interruption Loan Scheme (CBILS) .  The scheme allows for loans of up to £5 million for up to 6 years.  Unfortunately, according to the Guardian newspaper only 4,200 out of 300,000 SMEs were approved for a loan.

In Israel, the Start-up-Nation, a country of similar size to Switzerland, the government launched an $80 billion ($22 billion) aid package to help SMEs.  According to the Israeli finance ministry, as of April 1st only 25 out of 3,500 SMEs seeking a loan were actually approved.

Meanwhile, if you are lucky enough to have your business based in Switzerland, the government’s  CHF 62 billion aid package is providing interest free loans of up to CHF 500,000 ($514,000) with losses to Banks guaranteed at 100% by the Government.  Businesses in Switzerland will stay in business thanks to government support.