New COVID-19 Loan Scheme delivered by SBCI

A new COVID-19 Loan Scheme has been launched to further help businesses to recover from the pandemic. The scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI),

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.

The new scheme 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.

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 TD announced the loan scheme today.

Tánaiste Leo Varadkar said, “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.”

SBCI

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

June Butler, 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.”

What’s available?

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.

Who’s eligible?

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

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.

Access to Finance

Enterprise Nation are working with SBCI, BPFI & Sage to support 30,000 small businesses across Ireland with the information on funding options.

For more information on Access to Finance click here.