Farm businesses will have access to the €2bn Covid Guarantee Scheme (CGS) coming on stream in the coming weeks. Tánaiste and Minister for Business Leo Varadkar said the scheme would provide low-cost loans to businesses that needed them the most.

SMEs and businesses with less than 500 employees are eligible for the scheme. Loans from €10,000 to €1m will be in place with a guarantee rate of 80% for the State with the lenders retaining 20% of the risk of the loan.

It is envisioned that SMEs will be the largest beneficiaries of the scheme, but primary agriculture businesses will also have access to funds.

The scheme will be operated by the Strategic Banking Corporation of Ireland (SBCI) and will be available through Ulster Bank, Bank of Ireland and AIB.

Details include:

  • The borrower will have to declare an adverse impact of minimum 15% of actual or projected turnover or profit due to the impact of COVID-19.
  • The products covered under the scheme will include a broad range of credit facilities including overdrafts, working capital and term loan facilities.
  • Capital and/or interest moratoria for specific periods of time (up to one year) will be permitted under the scheme but any decision regarding such moratoria will be at the discretion of the individual lender based on their assessment of their customer.
  • A guarantee premium on each loan under the scheme is required to be paid in addition to interest rate costs (for SMEs it is 0.25% in the first year, 0.50% in years two and three, and 1% in years four, five and six).
  • The scheme will be time-bound and will be available initially until 31 December 2020.
  • The rollover of loans will be facilitated but no loan included in the scheme can extend beyond 31 December 2026.
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