Covid-19 Credit Guarantee Scheme launched to aid SMEs
The new Covid-19 Credit Guarantee scheme was launch today to help businesses, including in the farming and fishing sectors, deal with the financial impact of Covid-19. SMEs in Ireland will be able to apply for loans with participating banks for loans covered by the €2 billion scheme from today. Businesses will be allowed to borrow up to €1 million, with 80% of the approved loan guaranteed by the State.
As the largest ever state-backed loan guarantee scheme in Ireland, the scheme aims to help businesses adapt to trading post Covid-19. “The Government is determined to help businesses as they operate in a fundamentally changed trading environment," said Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar.
"This unprecedented measure will ensure businesses have access to the finance they need at this unprecedented time." SMEs looking to avail of the scheme will have to apply through participating banks- AIB, Bank of Ireland and Ulster Bank- as providers of the Strategic Banking Corporation of Ireland (SBCI) scheme.
Applicants will have to declare that their turnover or projected turnover has fallen by 15% because of the coronavirus pandemic, and eligible businesses will be able to take out term loans that will be repayable over a maximum of six years.
The minimum amount that can be borrowed will be €10,000, rising to a maximum of €1 million, with interest rates set to vary. "In bringing the Covid-19 Credit Guarantee Scheme to market the Government has provided micro businesses, SMEs and small mid-caps with the opportunity to access to lower-cost funding during this challenging period," said SBCI CEO Nick Ashmore.
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