How banks help SMEs grow

In Switzerland, over 99 per cent of companies are SMEs, accounting for around two-thirds of all jobs. Without them, the economy would grind to a halt.

Anyone who wants to hire employees, expand their premises or buy machinery needs money – often more than day-to-day business generates.

Banks play a key role here. Bank financing often determines whether companies grow or stagnate.

Bank loans are the most important source of financing for Swiss SMEs. The volume of domestic corporate bank loans has risen significantly in recent years – from CHF 289 billion in 2016 to over CHF 400 billion in 2024. Around 90 per cent of this volume went to SMEs.

This shows that a large part of the growth capital for small and medium-sized enterprises comes directly from the banking world.

From account limits to mortgage loans

For example, if a start-up company is about to receive its first large order, it needs liquidity to purchase materials. A bank bridges this period with a loan or an overdraft facility. Without this support, the order would be almost impossible to fulfil.

If a manufacturing company wants to upgrade its machinery to become more energy-efficient and reduce costs, it can finance modern, energy-saving equipment with an investment loan – and at the same time advance its own climate goals.

And a construction company that wants to move into its own factory floor can finance this with a commercial mortgage: the bank covers a large part of the purchase price, and arranges interest and amortisation payments to match the expected cash flow, thus enabling the company to keep occupancy costs stable and build up long-term assets through its own commercial property.

More than just money

According to a Seco study from 2021, only a small proportion of loan applications – 3 per cent – are rejected. However, this is conditional on the application passing the initial review, which clarifies expectations, for example, in terms of the amount and conditions.

But banks are not just lenders. They advise, analyse risks and open up new perspectives. They often act as mentors for entrepreneurs who are thinking about the next phase of growth. They also offer access to networks and support programmes.

This shows how strongly banks focus on long-term relationships and reliable business models. Whether it's starting up, growth, digitalisation, sustainability or succession, SMEs that reach out to their bank at an early stage lay the foundation for sustainable growth