Press release
Tánaiste announces COVID-19 Credit Guarantee Scheme extension
From Department of Enterprise, Trade and Employment
Published on
Last updated on
From Department of Enterprise, Trade and Employment
Published on
Last updated on
Low-cost loans will continue to be available to Irish small and medium enterprises under the COVID-19 Credit Guarantee Scheme (CCGS) until 30 June 2022, the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar TD announced today.
The COVID-19 Credit Guarantee Scheme is available through a wide range of lenders including three banks, six non-bank finance providers and 19 credit unions. Unsecured loans of up to €250,000, at reduced interest rates are available to SMEs, primary producers and small mid-caps (companies employing less than 500).
To date the Scheme has approved loans to more than 9,000 businesses. This is the most rapid deployment of such a level of lending to businesses in the history of the state, with the Scheme operational since September 2020.
The continuation of the Scheme for a further six months will provide options for small businesses who need increased liquidity as they move toward a changed but more stable trading environment.
The Tánaiste said:
"The COVID-19 Credit Guarantee Scheme is the largest state guarantee in the history of the state. It has been a very useful option for over 9,000 small and medium sized businesses and primary producers since its launch in September 2020 and we estimate that over 63,000 jobs have been maintained which would otherwise have been at risk without the Scheme.
"The extension of this Scheme will give business a level of certainty that if they need liquidity, they will be able to access low-cost loans, unsecured up to €250,000. This will help business react to ongoing developments and take advantage of any opportunities over the coming months.
"In the aftermath of the last recession, access to credit for viable but vulnerable businesses was a huge problem. Businesses failed that might have survived, jobs were lost and even businesses that were doing well could not get the loans they needed to expand or invest. The picture is very different today. This ensures easier access to credit, lower interest rates and longer repayment periods for business than would otherwise be the case.
"This Scheme is just one of the ways we are backing businesses and helping them through this challenging period. The EWSS, CRSS, commercial rates waiver and other grants remain in place."
This extension has been made possible by an extension of the European Commission’s State Aid Temporary Framework, which allows exceptional aid for businesses impacted by COVID-19.
The CCGS was developed specifically in response to the COVID-19 pandemic and was launched in September 2020 to provide access to appropriate finance for SMEs and small mid-caps. The scheme is operating under the Temporary State-Aid Framework which was initially due to expire at the end of December 2020. However, the European Commission has approved the latest extension of the Temporary State-Aid Framework to the end of June 2022. Subsequently, Ireland has availed of this opportunity and extended the CCGS to the end of June 2022.
The €2 billion lending cap was set in 2020 to give confidence to the business community that lending would be available to meet their needs resulting from the impact of COVID-19. It also gave confidence to the market and was set as a ceiling and not a target.
The features have been chosen with the objective of maximising the impact of the scheme for borrowers in the short to medium term and addressing their liquidity requirements. The main features are as follows:
The Scheme has been prepared in order to comply with the terms of the European Commission’s Temporary State Aid Framework. In particular: