Covid-19: Liquidity Management

The Federal Council has adopted a bridging programme of CHF 40bn for liquidity shortfalls, which will be effective from 26 March 2020. Companies can apply to their banks for bridging credit facilities for up to 10% of their annual turnover and no more than CHF 20m. The bridging loans granted by the Federal Council require to prepare an exhaustive documentation and a complex application process.

Companies need to meet certain measures: 

  • The first tranche of credit facility up to CHF 500’000 is easy to obtain from your banking partner. This procedure requires a day at maximum from starting your request to the cash settlement and should be undertaken as soon as possible.
  • The second tranche of credit facility up to CHF 20’000’000  is more complex to obtain (only after having obtained the first tranche). 

We recommend that you prepare to get ready with the documentation. The bank will run an in-depth analysis before granting such amount of money since 15% of the loan will be under their own credit risk. To secure the acceptance of your credit request, you should enclose the following documentation to your demand:

  • Describe historical financial performance in value and ratios, i.e. Key Performance Indicators (KPIs) of your industry
  • Provide a short term and long-term liquidity management plan
  • Establish a financial business plan with scenarios of coronavirus impact(s) on financials
  • Put together a ’Sources and Uses’ table
  • Project future financial and banking performance ratios

While you may face various new sanitary, business and logistical issues, it is critical to take a step back and build a convincing action plan.

Our services
Our experts are available to help you to build your case and ensure liquidity management continuity in this unprecedented environment. As the situation is evolving continuously, managers and business owners need agile representation of their current cash position and short-term liabilities. The financial model used to raise money will be a management and performance tool to help you in your business decision. Your Mazars’ team can assist you in preparing necessary banking documentation to obtain successfully the second tranche of credit facility.

Do not hesitate to submit your questions via the form below or contact our experts.

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