- Switzerland offers quick access to credit and emergency loans.
- The International Monetary Fund says COVID-19 has already plunged the world into recession.
- The British Federation of Small Businesses has called access to support “nightmarish”.
Switzerland is stepping up aid for small businesses to help stave off the economic effects of the coronavirus – setting an example for other countries surviving the recession.
As governments around the world introduce financial support measures For their citizens, companies in some countries complain that they cannot access funds quickly enough to stay afloat.
But the Swiss Federal Council offers quick access to credit facilities to meet lack of liquidity. The country distributed emergency loans to more than 76,000 small businesses, significantly more than in other European countries, according to the Financial Times.
The quick action plan was the idea of Thomas Gottstein, chief executive of Credit Suisse, reports the FT, who worked with Finance Minister Ueli Maurer and others to set up a task force.
“The main thing was that the process was carried out quickly and directly, so that the money was transferred as quickly as possible to the account of the company,” Mr Gottstein said in the FT.
Switzerland is one of the countries hard hit by the COVID-19 epidemic. On March 16, the Federal Council declared a national state of emergency, closing all shops, restaurants, bars, entertainment venues and schools until April 19, banning public gatherings of five or more people and recommending that all citizens to stay at home.
Responding to the COVID-19 pandemic requires global cooperation between governments, international organizations and business community, which is at the center of the World Economic Forum’s mission as an international organization for public-private cooperation.
Since its launch on March 11, the Forum COVID Action Platform brought together 1,667 stakeholders from 1,106 businesses and organizations to mitigate the risk and impact of the unprecedented global health emergency of COVID-19.
The platform is created with the support of the World Health Organization and is open to all companies and industry groups, as well as other stakeholders, with the aim of integrating and informing action common.
As an organization, the Forum has a reputation for supporting efforts to contain epidemics. In 2017, at our annual meeting, the Coalition for epidemic preparedness innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate vaccine development. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.
Other countries have also adopted strict lockdown measures to stave off the crisis. While this should help mitigate the human cost, the International Monetary Fund (IMF) says it already has plunged the world into a recession. In the United States alone, in the last two weeks of March, nearly 10 million people applied for unemployment benefits.
“For 2020, it will be worse than the global financial crisis,” the IMF said. “The economic damage is increasing in all countries, following the sharp increase in new infections and the containment measures put in place. “
Small and medium-sized enterprises are the engine of the global economy – and are also among the most affected by the pandemic. They play a major role in most economies, according to the World Bank, accounting for around 90% of businesses and more than 50% of jobs worldwide.
To help support them, policymakers around the world are taking a number of steps. In the United States, the government offers one-off tax breaks to individuals as well as $ 349 billion Small Business Administration Loans and guarantees to help small businesses that retain workers.
The Chinese administration has extended its loans and rediscounts facilities to support micro, small and medium enterprises; and taken measures to ensure liquidity is maintained for small enterprises.
In the UK, the Coronavirus Business Interruption Loan Scheme (CBILS) has faced challenges, where business owners have said they could not access funding quickly enough. It is now considerably extended, with some changes in functionality and eligibility criteria to broaden its scope.
The FT reported that Germany’s emergency loan program has also “had mixed success,” with money taking too long to arrive.
In the UK, the Federation of Small Businesses hailed the latest measures to improve access to the coronavirus business interruption loan program.
“Time and time again we have heard from members approaching their bank asking for an emergency loan, only to be offered something else,” said FSB National President Mike Cherry. “They’ve been promised interest-free, no-cost, government-backed support from the banks, but so far the process of securing has been a nightmare for many.”