Bank Debt, Private Debt & Alternative Financing in Switzerland: Build a Financing Stack That Wins (With Real Market Stats)

Most companies don’t fail because they lack ideas. They fail because cash, timing, and financing optionality don’t align when reality arrives with its cold, indifferent spreadsheet.

In Switzerland (and across Europe), the smart move is no longer “get a bank loan.” It’s to engineer a financing stack: bank debt for stability, private/structured debt for speed and flexibility, and alternative financing for capital efficiency—without giving away the company too early.

And yes: the Swiss market is bigger and more diverse than most founders assume.

Bank debt: still the backbone (and it’s grown massively)

Swiss bank lending to SMEs has expanded for years. One clear indicator: SME mortgage lending rose from ~CHF 260bn (2008) to ~CHF 400bn by early 2025—an increase of over 50%. Meanwhile, other SME credit (non-mortgage) remained broadly stable, averaging around CHF 80bn from 2010 to early 2025. 

In other words: banks love well-secured lending, and SMEs love lower pricing—so mortgage-backed lending keeps dominating.

Strengthen relationships with your existing banks

Banks' price uncertainty. Reduce uncertainty and you improve your terms (pricing, covenants, collateral, tenor).

What actually moves the needle:

• Proactive reporting (monthly/quarterly): revenue, margin, order book, working capital, cash.
• Real liquidity planning: budgets and liquidity plans are explicitly part of what banks expect in a credit file.
• No surprises: signal issues early; don’t wait until the “emergency loan” moment.

A useful reality check from Swiss SME financing data: Only ~3% of credit applications were rejected (internationally low).
So if your file is clean and coherent, the odds are not as grim as your inner pessimist thinks.

Build relationships with new banking partners (it’s strategic optionality)

Swiss SMEs are generally sticky with their banks: Only 1.4% changed their main bank in the past year, and SMEs have 1.93 bank relationships on average. 

Building a second/third bank relationship is a competitive advantage because most firms don’t do it proactively.

How to do it right:

• Start with transaction services (cash management, guarantees).
• Show “information discipline”: fast responses, complete documents, consistent numbers.
• Avoid approaching new banks only when the building is already on fire.

Private debt: the Swiss market is shifting (and the numbers prove it)

Swiss SMEs are increasingly diversifying away from pure bank financing:

• The share of SMEs with bank financing remained ~32% (unchanged vs 2016).
• Non-bank debt jumped from 6% (2016) to 15% (2021).
• The share of SMEs exclusively self-financed fell from 62% (2016) to 37% (2021) (pandemic loans contributed too). 

Private debt becomes relevant when:

• the timeline is tight
• the situation is non-standard
• the collateral package is unusual
• or you need more flexibility than bank credit policy allows

Yes, it can be more expensive than bank debt. But often you’re buying speed + structure + certainty of execution.

Structured debt: Senior, Unitranche, Mezzanine (the deal-engineering toolkit)

Structured debt is financial architecture—stacking risk, cost, and priority:

• Senior debt: first in repayment, lower cost, tighter covenants.
• Unitranche: one blended tranche (often from a credit fund) replacing senior + mezzanine; simpler and faster, but usually pricier than pure senior.
• Mezzanine: between debt and equity; fills the “gap” for growth, acquisitions, or shareholder-friendly structures.

This is standard in acquisition finance because it optimizes the debt/equity mix and increases purchasing power without instant dilution.

Bonds: straight or convertible (finance now, debate dilution later)

• Straight bonds: debt with a coupon and maturity, often used to broaden funding sources beyond banks.
• Convertible bonds: debt today, potential equity later—useful when:
  • growth is credible, but valuation is “too early,”
  • you want runway without immediate dilution,
  • investors accept upside via conversion.

Convertibles are basically a time-shifted negotiation: you postpone the equity argument until you’ve earned a better valuation.

Venture loans: non-dilutive oxygen for scale-ups

Venture loans/venture debt target high-growth firms (often VC-backed). Lenders focus on:

• investor quality and follow-on capacity,
• burn rate and unit economics,
• traction visibility,
• sometimes equity-like sweeteners (warrants).

This isn’t “cheap money,” but it can protect ownership at the moment equity would be most expensive (early).

Alternative financing: Asset Finance, RBF, Royalty-Based Financing… and Factoring (where you can actually make money)

Alternative financing is where funding gets smarter: less “balance-sheet ideology,” more alignment to assets or cash generation.

Asset Finance

Finance equipment, vehicles, infrastructure, IT—align repayment to the asset’s economic life. Capital-efficient and liquidity-friendly.

Revenue-Based Financing (RBF)

Repayment is linked to revenue (a percentage of sales). Best with recurring revenues, strong margins, and steady growth.

Royalty-Based Financing

Similar logic, often linked to a specific monetizable stream (licenses, product line, distribution economics).

Factoring/receivables financing (the hidden lever: supplier discounts)

Factoring is often pitched as “get cash faster.” True—but the real pro move is what you do after you get the cash:

If factoring accelerates cash inflows, you can pay suppliers earlier and negotiate early-payment discounts (rebates). Those rebates can:

• reduce your effective cost of factoring, because the supplier discount offsets part of the factoring fees/interest;
• sometimes even turn factoring into a net gain when the discount captured is larger than the financing cost.

Example logic (simple but powerful):
If you gain a 1–3% discount by paying early, and your all-in factoring cost is below (or close to) that, you’re not “paying for factoring”—you’re buying margin while improving supply-chain stability.

Two important caveats (because finance is never magic, only math):

• This works best when your supplier base is open to early payment discounts and your procurement can negotiate them consistently.
• You must track it properly (discount captured vs factoring cost) to avoid “fee blindness.”

Why this matters in Switzerland (stats + market context)

Non-bank financing is structurally meaningful in Switzerland:

• The share of SMEs using non-bank debt rose from 6% (2016) to 15% (2021), while bank financing stayed around 32%. 
  This shift is exactly where factoring and receivables-based solutions often sit: they fill working-capital gaps, smooth cash conversion cycles, and reduce dependence on classic credit lines.

And one more Swiss reality check: “discouraged borrowers” exist.

• Using a broad definition, around 10% of Swiss SMEs can be classified as discouraged; a narrower definition yields ~6.7%. 
  Meaning: plenty of firms don’t apply for funding or optimization tools—often leaving money on the table because the financial strategy isn’t packaged to lender logic or procurement logic.

The winning strategy: treat financing like a portfolio, not a single product

A resilient company builds a financing mix:

• bank debt for the base,
• private/structured debt for transactions and flexibility,
• bonds/convertibles for scaling,
• venture loans for runway,
• alternative financing to fund assets and working capital intelligently,
• and factoring not only for liquidity, but as a lever to capture supplier rebates and lower your effective financing cost.

That’s the meta-lesson: pricing matters, but optionality, speed, structure, and cash-cycle optimization are what win in the real world.