In Switzerland, business loans are offered by both banks and non-bank lenders. Although the specific criteria used to determine whether or not businesses qualify for loans vary from one lender to the next, certain criteria are universally employed. Here we list the most important criteria used by Swiss lenders when reviewing business loan applications.
Criteria 1: Debt collection cases
If a business is the subject of debt collection cases, property seizures, or bad debts, lenders generally will not grant that business a loan. Businesses which are not listed in a Swiss commercial register normally will not be approved for loans.
Criteria 2: Revenue
Some lenders only accept loan applications from business which meet minimum revenue requirements (100,000 francs in the past financial year, for example). Other lenders place a stronger emphasis on profits than on revenue, and these may not have minimum revenue requirements.
Criteria 3: Profit
Many lenders will not lend money to businesses which are not already making a profit. For this reason, startups and newly-established businesses are not eligible for loans from most lenders. In the absence of business loans, startup founders looking for financing will normally require venture capital from private investors. However, there are a handful of lenders which will accept loan applications from businesses which are not yet making a profit. These lenders place a stronger emphasis on other criteria like total revenues and cash flow than on profits.
Criteria 4: Age of business
Swiss lenders generally do not provide loans to businesses which have been established for less than two years. A newly-founded business looking for financing will normally require funding from private investors.
Criteria 5: Loan size
Minimum loan size requirements apply to business loans, and these vary from one lender to another. Some lenders only grant business loans with a minimum principal of 100,000 Swiss francs, while others grant loans as small as 10,000 francs. Some lenders also place a cap on the maximum amount of money they will lend in a single loan. One online lender limits business loans to a maximum of 500,000 francs. Other lenders do cap business loans, but review each application individually and decide on the maximum loan which they are willing to grant to each applicant.
Criteria 6: Loan term
One year is often the minimum term available for business loans, but loan terms as short as one month exist. Many lenders also have maximum loan terms (60 months or 72 months, for example). Some lenders do not have fixed maximum loan terms.
Criteria 7: Type of loan
Some lenders only offer amortizing loans which must be repaid in installments throughout the loan term in the same way as personal loans. Other lenders specialize in non-amortizing business loans which do not need to be repaid throughout the loan term.
Criteria 8: Type of company
Some lenders only grant business loans to companies which fall under the GmbH and AG categories. Other lenders also grant loans to general partnerships, limited partnerships, foundations, cooperatives, sole proprietorships and associations.
Criteria 9: Domicile of company
Swiss banks and non-bank lenders only provide business loans to companies which are domiciled in Switzerland (and Liechtenstein in some cases). Businesses domiciled outside of Switzerland are not normally eligible for Swiss business loans.
The above-listed primary criteria for business loan applications are accounted for by the moneyland.ch Swiss business loan comparison. If your business does not meet the criteria for a specific loan, that loan is not included in the comparison.
Some lenders also require businesses to provide collateral, and collateral requirements vary between these lenders. Surety bonds, property pledges and life insurance policies are examples of guarantees which may be accepted as collateral. Additional criteria may also apply, depending on the lender and the business involved.
Lenders normally require applicants to provide annual financial statements for the years leading up to the application in addition to financial data for the year in which the application is made. Applications are reviewed individually and accepted or rejected based on the information provided. The primary concern of lenders is determining whether a business is financially capable of meeting its debt repayment obligations.
Banks are generally more conservative than non-bank lenders in their granting of loans. You will normally be informed about whether your business loan application has been accepted or rejected within two business days.