Securing liquidity: how to ensure your SME survives the corona crisis

Apr 2, 2020.

The coronavirus has realised the worst fears of many small businesses, SMEs and self-employed people: their income has fallen dramatically while their expenses have stayed the same. Fixed costs for salaries or rent are eating into their reserves, and for many there is a growing fear of bankruptcy. With the right immediate measures, you can reduce expenses, compensate for loss of earnings and thus ensure liquidity.

How to reduce your expenses


First and foremost, try to not let yourself be overcome with shock. Seek out personal dialogue with creditors, banks, customers and suppliers. Solidarity is more important than ever. By communicating quickly, directly and transparently, you will achieve more in the long term than if you wait and potentially become involved in legal disputes.


Applying for short-time work for employees

As an entrepreneur, you can apply for short-time work to maintain jobs and compensate for lost revenue. The federal government is currently examining measures to enable applications to be submitted more easily and processed more quickly. It has already extended the scope of short-time work to include people with fixed-term and temporary contracts, people in pseudo-employer positions and apprentices. Experts estimate that up to 600,000 Swiss people will take up short-time work in the coming weeks.


Generali tip

Due to the current high number of applications, you should expect a certain waiting period until the Office for Economy and Labour has reviewed an application and can trigger payments. So don’t delay: send in your application today!


Compensation for loss of earnings for the self-employed

Self-employed persons who suffer a loss of earnings due to official measures to combat the coronavirus are compensated unless compensation or insurance benefits already exist. This means that the self-employed can now also secure their income.


Taking annual leave; reducing workloads and salaries

Owner salaries

If your situation permits, you can reduce your own salary as an owner. This can make a big difference for smaller companies. But don’t forget that a lower salary can have an impact on your retirement or unemployment benefits. AHV salaries can be reduced retrospectively to 1 January 2020.


Generali tip

Protect your family in these uncertain times. Check whether your life insurance (pillar 3b) includes the bankruptcy privilege and whether the people you would like to benefit are specified as beneficiaries. This means that your life insurance will be excluded from your bankruptcy estate and the money will remain with your family. Please contact your Generali advisor if you require further information.


Overtime and annual leave

You can request that your employees use the current situation to reduce their overtime, with their hours compensated on a 1:1 basis. You can also mandate that they take annual leave. If employees take annual leave during short-time work, they will receive a reduced salary.


Withholding salary

Discuss with your employees whether the company can currently withhold a portion of their salary. Most are likely to understand that the company’s survival and their job security are currently at stake.


Reducing contractual working hours

Ask your employees whether they are willing to take unpaid leave or reduce their contractual working hours for a certain period of time.


Splitting payments or extending payment deadlines

Business partners depend on one another, and there is a strong feeling of solidarity in these times of crisis. Seek out dialogue with those in your business environment and speak openly about your situation. The well-being of your company matters to your business partners too!



Make sure your company pays invoices for small amounts on time. This will help you avoid a flood of reminders. Ask billers of larger amounts for a deferral or the option to pay in instalments.



Suggest to your lender that the terms of repayment be adjusted. This will help ensure the liquidity of your company. Ultimately, your lender will also benefit because delayed repayment is still better than a complete loss. 


Mortgage interest and repayment

Clarify with your bank whether these payments can be suspended or whether the payment deadline can at least be extended.



Keep the inventory in your warehouse low. If possible, you should cancel open orders.



Ask your landlord whether they can temporarily reduce or suspend your rent. Or suggest that you pay part on a regular basis and the rest later.


In its press conference on 20 March, the Federal Council announced that the federal government plans to relax various deadlines to relieve the burden on industry.


How to procure liquid funds at short notice


In the current situation, there are quick and uncomplicated ways in which you as an SME can raise funds and stay liquid.


Emergency loan from your bank

Clarify as soon as possible with your bank advisor how you can benefit from the federal aid programme. On 25 March, the federal government announced the largest aid package in Switzerland’s history. It allows SMEs to quickly obtain emergency loans of up to CHF 20 million from their bank. A loan of up to CHF 500,000 will be approved with 0% interest and a full federal guarantee within less than an hour. 300 banks are involved in the programme.


Please note: The repayment period is five to seven years and is subject to various conditions. For example, no dividends may be distributed during this time. Further details can be found under Art. 6 “Purpose of the Joint Guarantee” in the commentary to the COVID-19 Joint Guarantee Ordinance. Check carefully whether a loan guaranteed by the federal government is the right instrument for your company.


Generali tip

If the federal credit limit does not meet your financing needs, there are additional, private solutions such as emergency financing for SMEs from Credit Gate 24.


Down payments from customers

Clarify with your customers whether they would be willing to pay for planned services in advance.




Keeping your company healthy during the current crisis is important too. To this end, careful planning is crucial. Plan your liquidity precisely and use the resources made available to you by your business environment and especially the federal government.