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A year in the pandemic

The SBCI CEO gives an analysis on how the risk-sharing schemes are supporting Irish businesses during these difficult times

Blogs & Videos
06 Apr 2021

More than a year since the outbreak of the pandemic, Covid-19 continues to impact so many different aspects of SMEs’ business operations and finances.

To help mitigate its effect on businesses and employment in general, governments around the world continue to implement and make available an unprecedented level of supports.

Since the first lockdown was declared here, the Government of Ireland has adopted a series of measures to support businesses in reacting to the Covid-19 pandemic. These have included providing funding to support the Strategic Banking Corporation Ireland (SBCI) Covid-19 Working Capital Loan Scheme and launching the Covid-19 Credit Guarantee Scheme, with both schemes targeted at assisting SMEs with easier access to lower priced finance to help them face the challenges ahead.

Covid-19 Working Capital Loan Scheme

A few weeks after the public announcement of the first lockdown, the SBCI brought to market the €200 million Covid-19 Working Capital Loan Scheme. This was as an immediate response to help businesses address the effects of the pandemic on the economy, in conjunction with the Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine.

The Covid-19 Working Capital Loan Scheme supports loans up to three years, with a fixed rate of 4%, loan amounts between €25,000 and €1.5 million and with loans up to €500,000 being unsecured.

A two-step application process has been designed to be as easy as possible for SMEs.

First, applicants need to log on to the SBCI website and visit the dedicated Scheme’s page, complete the application form and email it to the SBCI. The SBCI will assess the form and respond within 48 hours to confirm if the applicant is eligible for the Scheme. Eligible applicants will receive an “eligibility letter”.

Secondly, on receiving the eligibility letter the applicant needs to take it, together with an updated business plan (a template is available on the SBCI website, see here), to one of the finance providers to commence the loan application. The Covid-19 Working Capital Loan Scheme is available through AIB, Bank of Ireland and Ulster Bank. Applicants don’t need to be a client of the bank they decide to apply to.

In just one year, 996 loans with a total value of €134 million have been approved under this Scheme.

Covid-19 Credit Guarantee Scheme

In addition to these immediate measures, the Government launched the €2 billion Covid-19 Credit Guarantee Scheme in September 2020. This Scheme supports Irish businesses, including Primary producers (Farmers and Fishers), impacted by Covid-19 to access credit.

The Scheme covers facilities between €10,000 and €1 million up to five and a half years, with facilities of up to €250,000 being unsecured.

The Covid-19 Credit Guarantee Scheme also allows the refinance and rollover of certain finance agreements (e.g. Covid-19 related expenses that were initially funded through short-term or temporary loans, such as overdrafts).

This Scheme is available up to the end of December 2021 and is accessible through a wide range of lenders: banks, non-bank finance providers and 19 Credit Unions spread throughout the country. An updated list of Scheme’s lenders is available here.

The single-stage application process can be conducted directly through the Scheme’s lenders.

From September 2020 to early March 2021, more than 4,000 loans with a total value of €264 million have been approved under this Scheme.

The SBCI continues to stand behind its commitment to provide Irish SMEs with suitable funding support as an effective response to changing market conditions, new challenges and SMEs’ financing needs.

Ian Black, SBCI Interim CEO