SME Supports: COVID-19 Credit Guarantee Scheme From SBCI

/ 18th November 2020 /

The COVID-19 Credit Guarantee Scheme was launched in September as an exceptional measure to back Irish businesses facing the disruptive and unexpected consequences of the COVID-19 pandemic.

The primary aim of this €2 billion funding is to facilitate lending to Micro, SMEs and Small Mid-Caps, including Primary Producers (Agriculture and Fishing), with not more than 499 employees who are viable but vulnerable due to the economic impact of the pandemic.

The Scheme enables borrowers who have been adversely impacted by a minimum of 15% in actual or projected turnover or profit due to COVID-19 and are having difficulty in accessing credit to apply for low-cost funding that might not otherwise be available to them.

Designed to support and further the provision of finance to eligible businesses, the COVID-19 Credit Guarantee Scheme provides lenders with an 80% Government guarantee, and the interest rate charged by lenders will reflect the benefit of this guarantee resulting in a discounted interest rate being passed on to borrowers.

The maximum amount that a business can borrow under the Scheme cannot exceed €1 million, subject to being able to demonstrate adequate repayment capacity for the total level of borrowings.

How to Apply

Applications are made directly to the participating lenders (the updated list is available at www.sbci.gov.ie). There is no pre-eligibility screening for the COVID-19 Credit Guarantee Scheme by the SBCI, which is different to the other SBCI loan schemes (e.g. Future Growth Loan Scheme) where borrowers must complete the eligibility form on the SBCI website first.

It is important to emphasise that the Government guarantee is subject to the EU ‘Temporary Framework for State Aid Measures, to Support the Economy during the current COVID-19 Outbreak’. The European Temporary Aid Framework provides that the Scheme is available until 31 December 2020 or until it is fully subscribed.

Don't Delay Application

Interested businesses shouldn’t wait until the very last moment to apply as there is significant early interest in the Scheme. In its first three weeks of operation, over €15 million in loans has already been drawn under the COVID-19 Credit Guarantee Scheme across the country, with an average loan size over €45,000.

Businesses that have availed of this funding belong to diverse economic sectors showing the Scheme’s broad applicability: wholesale and retail (21%); hospitality industry (13%); agriculture, forestry and fishery (9%); and transportation and storage (7%).