The Government launched the COVID-19 Credit Guarantee Scheme (CGS) in May 2020, to support companies and primary producers (including agriculture and fishing) that had been negatively impacted by COVID-19 pandemic.

This scheme has since been extended to the end of 2021.

The CGS comprises a €2bn fund, with an 80% Government guarantee to participating lenders to provide Irish businesses and primary producers with access to low-interest loans without personal guarantees.

To be eligible to apply for this scheme, small businesses and primary producers must have, or expect to have, a reduction in their turnover or profitability of a minimum of 15%.

An example might be if a farmer contracted COVID-19 and had to hire labour.

Sole traders and private limited companies can also apply for this scheme.

Update on the CGS

In April 2021, there were more than 5,000 applications, with most of the businesses using it having fewer than 10 employees.

The scheme, originally available at the main banks, has since been extended to include 19 credit unions and a number of non-bank lenders.

A full list of all participating lenders is available on the Strategic Banking Corporation of Ireland (SBCI) website.

Up to the week ending 24 June 2021, there were 5,664 loans fully drawn to a value of €361,115,933 across the country.

How much can I apply under the CGS?

Loans provided under the scheme can range from €10,000 to €1m for terms from three months up to five and a half years, subject to loan amount and eligibility criteria.

Up to 12 months interest and/or capital moratoria (postpone or delay payment) are possible under the CGS. However, these are at the discretion of the participating lender.

You may need to provide certain supporting documents, such as management or audited accounts.

Who is not eligible to apply for theses CGS loans?

  • Businesses or primary producers that were already in financial difficulty on 31 December 2019.
  • Any business or primary producer that is bankrupt or who, in the last five years, has entered into an arrangement with creditors, or having its affairs administered by the courts.
  • Any businesses involved in any illegal activities are also not eligible to apply.
  • Can the loan be for any purpose?

    Loan purpose can be working capital (paying for stock, wages and other overheads) or investment (buying machinery or equipment).

    The CGS will also permit the refinance and rollover of debt incurred as a result of COVID-19, such as COVID-19-related expenses that were initially funded through short-term or temporary facilities such as overdrafts.

    No security will be required for loans up to €250,000 (unless it is a requirement of the product feature, such as asset finance).

    What is the interest rate?

    The interest rate charged will be determined by the participating lender, who will also collect a premium which will be payable to the Government.

    The premium applied can vary from 0.15% to 1.55%, depending on the term of the loan and the size of the farming business.

    The interest rate is a variable rate and will be lower than similar lending rates.

    Will I need to give security for CGS loan?

    Any loan amounts over €250,000 may be secured.

    A personal guarantee may only be sought in circumstances where it is required to capture supporting security or where it is an unsupported personal guarantee and is limited to a maximum of 20% of the initial finance agreement amount.

    What happens if I apply for the CGS and get declined by the lender?

    Firstly, you will need to appeal the decision to the finance provider.

    If this is unsuccessful, you may then make an appeal to the Credit Review Office, on condition the lender is a participating finance provider.

    To apply for the CGS, farmers and businesses can contact a participating lender directly.

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