A free guide for businesses on the government’s Covid-19 Credit Guarantee Scheme has been published by Banking and Payments Federation Ireland (BPFI).

The 15-page guide is available on the BPFI’s website and describes the key features of the new Credit Guarantee Scheme, which was launched last week. The guide also provides answers to common questions asked about the scheme, including:

• What types of businesses are eligible?
• How do I know whether the Scheme is the best option for my business?
• How do I calculate the maximum amount I can borrow under the Scheme?
• How do I apply for a loan under the Scheme?
• What information will I need to provide to a lender?
• Which lenders are providing funds?

Under the Credit Guarantee Scheme, the government is providing an 80% guarantee to participating banks to provide loans to eligible SMEs for up to six years.

The CGS will be managed by the SBCI, with funding available through AIB, Bank of Ireland and Ulster Bank. Financial products expected to be on offer through the CGS include overdrafts, term loans and working capital, although the focus is initially on term loans.

“The interest rate charged by participating lenders, while reflecting market competitiveness, will also reflect the benefit of the state guarantee to the lender and result in a discounted interest rate to borrowers,” said Ali Ugur, BPFI’s chief economist.

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Ugur added: “There’s a lot of practical, hands-on information in this guide and we would encourage all interested businesses to use this information for their own benefit. A great many businesses have been through very difficult and challenging times and may now be seeking lending to support their businesses. We believe this information will help them in managing the transition from lockdown to increased business activity levels.”