The Irish Government have announced a loan scheme to help SMEs access low-cost finance. 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.

Finance provided is competitively priced and some refinance can be availed of to help with any existing short-term credit a business may have.

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.

Loan Features

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

 Businesses eligible for the scheme:

• 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.

More Details

See SBCI website : https://sbci.gov.ie/products/covid-19-loan-scheme-cls

Disclaimer :

Whilst every effort has been made to ensure the accuracy of matters covered by this article, no responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of matters above. Professional advice should always be sought before acting on any interpretation of matters covered by this article.

 4 July 2022