The Strategic Banking Corporation of Ireland has introduced the Covid-19 Loan Scheme (‘CLS’).

The state-backed loan scheme offers SMEs including farmers, fishers, food businesses and small mid-caps, loans of between €25,000 and up to €1,500,000, with terms of one to six years and unsecured up to €500,000.

Interest rates on loans provided under the scheme will be lower than is otherwise typically available on similar lending in the market and will vary according to the lender.

Ministers said the CLS is in response to the required closure of the Covid-19 Credit Guarantee Scheme (CCGS) at the end of June 2022, which is a consequence of the cessation of the European Commission’s Covid-19 state-aid framework.

As of end of May 2022 the CCGS had helped 10,360 SMEs in Ireland with access to finance of €730m.

In Association with

Lenders participating in the CLS are separated into two cohorts. For the first, interest rates will be variable, but are capped at an initial maximum rate of 3.7% for loans less than €250,000 and 2.75% for loans of €250,000 and above.

For loans from the remaining lenders, a minimum discount of 1% relative to their standard rates will be required to for loans under the CLS. Loans under the scheme:

•     Range from €25,000 to €1.5 million

•     Are available for terms of one to six years

•     Are available without security where the loan amount is less than €500,000

•     Typically feature a lower interest rate than other comparable lending in the market

Loans can be used for:

•     Liquidity/Working capital

•     Investment

•     Refinancing: Up to 30% of new loans may be allowed for refinancing of existing short-term credit, for example, as arising due to COVID-19 impacts.

•     A business must also have experienced an adverse impact of a minimum 15% in turnover or profit due to the impact of Covid-19.

June Butler (pictured), CEO of SBCI, said: “The SBCI is delighted to add this guarantee loan scheme to its range of SME-friendly finance options and enable even more SMEs get access to low-cost, flexible finance.

“As the economy transitions into the post-pandemic phase, this new scheme will be of significant benefit to Irish SMEs during the recovery period and beyond. Offering discounted state-backed lending, this scheme will continue to help Irish businesses prosper and grow sustainably into the future.”

The scheme is delivered by SBCI through participating lenders. Information on the application process can be found on the SBCI website.