Open to SMEs including farmers, fishers and food businesses
Low-cost loans between €25,000 and €1.5 million available
Monday, 4 July 2022
The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, the Minister for Agriculture, Food and the Marine, Charlie Mc Conalogue TD, and the Minister for Finance Paschal Donohoe TDtoday announced a further loan scheme to help SMEs access low-cost finance, recognising that many of them are still getting back on their feet after what has been an incredibly challenging few years.
The COVID-19 Loan Scheme (‘CLS’) is a state-backed loan scheme, offering 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.
Finance provided is competitively priced and some refinance can be availed of to help with any existing short-term credit a business may have.
“There are currently more people employed in Ireland than ever before in the history of the state. That would have been unimaginable a few months ago even. However, many businesses are still getting back on their feet after what has been an incredibly challenging period. I know Putin’s war on Ukraine has caused more uncertainty.
“These State-backed loan schemes are working well. The existing Covid Credit Guarantee Scheme helped more than 10,000 SMEs access low-cost credit. This successor scheme will give SMEs, including farmers, fishers and food businesses, the option to access really competitively priced loans, should they need to avail of that option, in addition to the other help that is available. It’s about giving SMEs as many options as possible.”
Minister for Agriculture, Food and the Marine, Charlie Mc Conalogue TD said:
“I am pleased that the COVID-19 Loan Scheme will be available to farm families, fishers and food businesses. The resilience shown by the agri-food sector during the pandemic was remarkable as it continued to produce high quality produce for consumers at home and abroad. This State-backed source of finance will complement other measures introduced by my Department to alleviate the considerable impact of the pandemic on the agri-food sector.”
Minister for Finance Paschal Donohoe TD said:
“The Government is committed to supporting our SME sector. Alongside the Brexit Impact Loan Scheme, the COVID-19 Loan Scheme will ensure that businesses continue to have access to longer term unsecured lending as they deal with the impact of the pandemic. As well as working capital, loans can be used for investment and I urge businesses to exploit such investment opportunities to grow, develop and embrace digital and climate transition.”
June Butler, CEO of SBCI said:
“The new COVID-19 Loan Scheme will support SMEs throughout Ireland as they continue to deal with the economic effects of the pandemic. 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 the Strategic Banking Corporation of Ireland (SBCI), through participating lenders and information on the application process can be found on the SBCI website at www.sbci.gov.ie
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 at this time. As of end of May 2022 the CCGS had helped 10,357 SMEs in Ireland with access to finance of €730.2 million.
The CLS benefits from support from the European Investment Bank Group through the European Commission’s “European Guarantee Fund”.
NOTES TO EDITOR
The COVID-19 Loan Scheme (the ‘CLS’) is available to COVID-19 impacted eligible SMEs, including farmers and fishers, and small mid-caps in Ireland, to support them as they respond to the impacts of the COVID-19 pandemic.
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
- 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.
Businesses eligible for the scheme:
- This Scheme is available to eligible SME and small Mid-Cap businesses, including primary producers (businesses engaged in farming and fishing), established in Ireland.
- A business must also have experienced an adverse impact of a minimum 15% in turnover or profit due to the impact of COVID-19.
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.
Lenders participating in the Scheme 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.
The Data Protection Notice for the Scheme is available here: Data Protection Statement – COVID-19 Loan Scheme: Data Protection Statement - COVID-19 Loan Scheme (CLS) (PDF, 301KB)
The Department of Enterprise, Trade and Employment (DETE) plays a key role in implementing the Government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The Department has lead responsibility for Irish policy on global trade and inward investment and a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.
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