€2 billion COVID-19 Credit Guarantee Scheme opens for applications

The Government’s €2 billion Covid-19 Credit Guarantee Scheme has opened for applications, aimed at providing Irish businesses with access to low cost loans as they respond to the ongoing impact of COVID-19.

The Government is using its own good credit rating to help businesses borrow more cheaply while it attempts to keep the most vulnerable sectors as buoyant and liquid as possible. The €2 billion will be available for SMEs, small mid-caps and for primary producers. The expansion of the scheme and the provision of unsecured loans of up to €250,000 has significantly improved the impact of the scheme.

The scheme is operated by the Strategic Banking Corporation of Ireland (SBCI) and delivered through participating finance providers, allowing affected businesses to access additional financing through traditional lenders. Initially, the scheme’s focus is on term loans, but support for other loan products may be added in the future such as overdraft facilities and working capital lending.

The scheme provides low cost loans from €10,000 to €1 million to businesses, in addition to the grants that are already available. Businesses can apply directly to a participating bank. Under the scheme the government will provide an 80% guarantee for the loan to participating banks to provide low interest loans to eligible SMEs for up to six years. Businesses will be required to declare that their turnover or projected turnover has been reduced by 15% because of COVID-19.

The participating finance providers include AIB, Bank of Ireland and Ulster Bank with other lenders expected to come on board shortly. Businesses need not have previously been clients of a participating provider to apply. The scheme will be available until the end of 2020.

Further information on the scheme can be assessed here.