Government of Ireland

What is the Credit Guarantee Scheme?

The Covid-19 Credit Guarantee Scheme has been developed by the Department of Business, Enterprise and Innovation (DBEI) to support businesses disrupted by the pandemic. The Strategic Banking Corporation of Ireland (SBCI) has been appointed as operators of the scheme which has the aim of providing low-cost funding for businesses.

The scheme will facilitate up to €2 billion in lending to eligible businesses. This can be through traditional bank loans or through financing options such as Invoice Finance which do not incur long-term debt.

The scheme will be available until 31st December 2020 on a first-come, first-served basis.

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Credit Guarantee Scheme and Invoice Finance can support your business

Credit Guarantee Scheme and Invoice Finance

We offer access to Credit Guarantee Scheme funding through our Invoice Finance facilities.

Invoice Finance is designed to help businesses manage cash flow and build working capital. It is ideal for businesses which face cash flow challenges or want to finance growth. It allows you to bridge the gap between raising a customer invoice and being paid. By releasing that cash quickly, you can manage the day-to-day activities of your business and plan for growth with a sustainable cash flow that builds working capital.

Invoice Finance is flexible because this funding model matches the performance of your business. Based on your invoices, this means you will not struggle with high fixed repayments as you might with a loan or overdraft. It also means your funding can increase in line with your business growth.

Download a guide to Invoice Finance

Are you eligible for Invoice Finance?

You are likely to be eligible for Invoice Finance if you:

  • Provide goods and/or services to other businesses
  • Issue your customers with credit terms of between 30 and 90 days
  • Have strong credit management and control reporting tools

Read our FAQs for CGS eligibility criteria.

How the Credit Guarantee Scheme can benefit your business

  • Facility amounts up to €1 million
  • Term of up to 2 years
  • Guarantee Premium applies

  • A discounted rate of 0.5% will be applied on our standard facility rates
  • Available for Eligible Micro enterprises, SMEs and Small Midcaps

Credit Guarantee Scheme FAQs

What is Covid-19 Credit Guarantee Scheme?

The Covid-19 pandemic has severely disrupted economic activity. The Credit Guarantee Scheme (CGS) was set up to encourage lenders to support recovery by providing low-cost funding to businesses coping with the impact.

If your business has been affected by Covid-19, you can apply for a facility to:

  • fund working capital including liquidity needs
  • invest so your business can adapt
  • refinance of debt incurred as a result of Covid-19: (e.g. Covid-19 related expenses that were initially funded through short term/temporary facilities such as overdrafts)

How long will it run for?

It will run from 7th September 2020 until 31 December 2020 or until it is fully subscribed.

What facility terms are available?

CGS facilities range from three months up to five years and six months.

What funding amounts are available?

Facilities of up to €1,000,000 are available subject to eligibility criteria.

Under the rules of the scheme as set out by the Strategic Banking Corporation of Ireland (SBCI), the facility amount you are seeking cannot be more than:

  • 25% of your turnover in 2019, or
  • double your annual wage bill in 2019 or the last year available

Your wage bill should include social charges as well as the cost of personnel working on site but formally in the payroll of subcontractors. For businesses set up after 1 January 2019, the loan cannot be more than the estimated annual wage bill for the first two years in operation.

You can take out more than one facility, subject to the overall CGS limits per provider and your capacity to repay.

What is the government guarantee premium?

A guarantee premium is payable to the government and will apply to all CGS facilities. It represents the cost to the government of providing the 80% guarantee to participating lenders.

This premium is payable in addition to your fees for an Invoice Finance facility. We will collect it and pass it on to the SBCI which will, in turn, pass it on to the Department of Business Enterprise and Innovation.

The premium will be determined by:

  • the type of beneficiary
  • the term of the facility
  • the loan amount outstanding

You can get more information on the government guarantee premium from the SBCI.

What is the difference between SMEs and Mid-Caps?

SMEs are defined by the Standard EU definition [Commission Regulation 2003/361/EC] as enterprises that:

  • have fewer than 250 employees
  • have a turnover of €50 million or less (or €43 million or less on their balance sheet).
  • are independent and autonomous (i.e. not part of a wider group of enterprises)
  • have less than 25% of their capital held by public bodies
  • are established and operating in the Republic of Ireland

A Small Mid-Cap is an enterprise that is not an SME but has fewer than 500 employees.

Can the CGS be used to refinance?

The scheme will permit refinance of debt incurred as a result of Covid-19: (e.g. Covid-19 related expenses that were initially funded through short term/temporary facilities such as overdrafts).

Do I qualify for a CGS facility?

To qualify for a CGS facility, you must be able to confirm that your business:

  • was viable and not in financial difficulty on 31 December 2019
  • can return to viability in the future
  • has seen or will see its actual or potential turnover or profit reduced by at least 15% due to Covid-19

If you don’t qualify for a CGS facility, you can still apply for one of our standard Invoice Finance facilities.

What is state aid?

Funding for the CGS is provided under the EU Commission Temporary State Aid framework.

If you have received state aid in the past, you will have received a letter from the public agency that provided it. These include SBCI, Enterprise Ireland, Bord Bia or your Local Enterprise Office.

What is a NACE code?

NACE, or the Statistical Classification of Economic Activities in the European Community, is the European Union’s system for classifying different business sectors. You can get a list of eligible NACE codes for this scheme from the SBCI.

How do I apply?

There is no need to get in touch with the SBCI. You can apply directly through our website.

We may need some documents to help us make a decision about your loan application. These may include:

  • 2019 Management Accounts; or
  • 2019 Certified Accounts; or
  • 2019 Audited Accounts

What rates are charged for the government guarantee premium?

The premium rate that will apply will depend on the size of the business and the length of time for which the credit is being advanced, as per the examples below:

Duration of facility and rates for SMEs:

Duration of Facility 1 year 2 years 3 years 4 years 5 years 5.5 years
Rate % 0.15% 0.26% 0.29% 0.50% 0.61% 0.68%

Duration of facility and rates for Small Mid-Caps:

Duration of Facility 1 year 2 years 3 years 4 years 5 years 5.5 years
Rate % 0.30% 0.63% 0.73% 1.19% 1.40% 1.55%