COVID-19 Loan Scheme

In addition to the criteria listed in the “Loan Features” section above, the financing arrangements must meet all of the following criteria:

• The loan must be provided in compliance with the relevant State aid regime
• The loan must be made available in a Member State
• The loan must be entered into by 31 December 2022
• The loan must be granted for one or more of the following purposes:
  1. investment in tangible and/or intangible assets; and/or
  2. working capital/liquidity needs; and/or
  3. refinancing of existing obligations as defined by the on-lender’s credit and collection policies;
• The loan must be term loan denominated in euro
• The loan must have a minimum maturity of one year
• The final maturity date of the loan must not fall after 30 December 2037
• The loan must comply with any applicable transfer of benefit terms under the regime
• The loan shall not finance illegal activities or artificial arrangements aimed at tax avoidance
• The documents governing the loan must be legal, valid, binding and enforceable under applicable law
• The loan must not finance transactions with a sanctioned person.

In addition to the excluded activities listed above, loans will not be provided to SMEs or Small Mid-Caps that have a substantial focus in any of the following sectors:

• Production or trade in wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species or Wild Fauna and Flora (CITES)
• Cross-border trade in waste and waste products unless compliant with the Basel Convention and the underlying national and EU regulations but for the avoidance of doubt, use of waste as a fuel in district heating is not excluded
• Live animals for scientific and experimental purposes, including the breeding of these animals, unless in compliance with the EU Directive 2010/63/EU as amended by Regulation (EU) 2019/1010 of the European Parliament and of the Council on the protection of animals used for scientific purposes
• Production or activities involving harmful or exploitative forms of forced labour or harmful child labour
• Any business relating to pornography or prostitution
• Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements
• Commercial concessions over, and logging on, tropical natural forest
• Conversion of natural forest into a plantation
• Purchase of logging equipment for use in tropical natural forests or high nature value forest in all regions
• Activities that lead to clear cutting and/or degradation of tropical natural forests or high nature value forest
• Any business with a political or religious content
• Production and distribution of racist, anti-democratic and/or neo-Nazi media.

The applicant must not use the loan proceeds for:

• financing of specific export operations
• financing current expenditure linked to the export activity
• financing contingent upon the use of domestic over imported products
• financing the establishment and operation of a distribution network in other Member States, or
• financing aid to primary agriculture, fishery and aquaculture that are subject to conditions as detailed in the relevant De Minimis Regulation.

In addition to the definition of SMEs above, please see also the following definition for qualifying enterprises:

“Branch” has the same meaning as it has in Commission Regulation (EU) 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, and includes an establishment within the meaning of that Regulation.

“Qualifying Enterprises” means:

(a) an SME established, or with a branch (as defined above), in the State, or

(b) a Small Mid-cap established, or with a branch (as defined above), in the State.

“Commission Recommendation” means Commission Recommendation (2003/361/EC) of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises.

“SMEs” means a micro, small or medium-sized enterprise within the meaning of the Commission Recommendation (as defined above).

“Small Mid-Cap Enterprise” means an enterprise within the meaning of Article 1 of Title I of the Annex to the Commission Recommendation (as defined above) which:

(a) has not more than 499 employees calculated in accordance with Articles 3, 4, 5 and 6 of Title I of the Annex of the Commission Recommendation, and

(b) is not an SME.

In addition to the exclusions listed above, SMEs or Small Mid-caps that fulfil the following criteria are not eligible under the Scheme:

An SME/Small Mid-Cap that:

• on account of the relevant loan having been granted under the De Minimis Regulation:
  • (in respect of SMEs) are subject to, or fulfil the criteria under domestic law for being placed in, collective insolvency proceedings;
  • (in respect of Small Mid-Caps) either (i) are subject to, or fulfil the criteria under domestic law for being placed in, collective insolvency proceedings;
• is performing research and innovation activities that are related to illegal activities or excluded activities (see above); or
• has a substantial focus in any of the following sectors: illegal economic activities, tobacco and distilled alcoholic beverages, weapons and ammunition, casinos, human cloning or genetically modified organisms or IT sectors relating to internet gambling, online casinos or pornography or which are intended to enable illegal entry of electronic data networks or illegal download of electronic data.

In addition to the eligibility criteria listed above, SMEs/Small Mid-Caps must satisfy all of the following criteria:

• It is established and operating in a Member State
• It does not have a substantial focus on one or more excluded sectors (see Excluded Activities)
• It is not established in a non-compliant jurisdiction
• It is not delinquent or in default in respect of any other loan or lease either granted by the on-lender or by another financial institution unless (i) it has been delinquent for less than 20 (twenty) days and (ii) such delinquency does not dissuade the on-lender from lending to the SME/Small Mid-Cap in accordance with its credit policy
• It is not engaged in any illegal activities
• It is not a sanctioned person or in breach of restrictive measures
• It is not in an exclusion situation (as such term is defined in the application form)
• It is not subject to any preferential tax measure regarded as harmful under the EU list of non-cooperative jurisdictions for tax purposes.

There is a two-step process to apply for a loan:

STEP 1 - First, complete the Eligibility Application Form available on the SBCI website. If your application is successful, you will receive an eligibility letter/code from the SBCI. Please note, the SBCI eligibility letter/code is not a guarantee of credit approval.

STEP 2 - Once you receive your confirmation eligibility code, you must then engage with the Scheme’s participating on-lenders to begin their standard loan application process. It is only at this stage that a decision will be made on credit approval.

SMEs can apply for loans of €25,000 to €1.5 million under the COVID-19 Loan Scheme.

Please note, Small Mid-Caps can apply for a loan up to a maximum of €1.4 million.

Loans are available for periods of up to six years in duration.

Loans are available until 31 December 2022, or until the scheme is fully subscribed.

The SBCI eligibility number is valid for six months from the date of issue, but always subject to the scheme remaining open and having funding available.

Yes. The SBCI eligibility letter/code can be used multiple times, provided that you don't exceed the maximum loan amount available under the scheme (€1.5 million for SMEs, €1.4 million for Small Mid-Caps) and that the eligibility letter/code hasn't expired.

This depends on the loan amount involved, the on-lender's own process, and if the on-lender has all the information needed to process your application. Each on-lender's website provide details on their loan application times.

Yes. You can use the same SBCI eligibility letter/code to apply for a loan to different on-lenders provided that you don't exceed the maximum loan amount available under the Scheme (€1.5 million for SMEs, €1.4 million for Small Mid-Caps) and that the eligibility code hasn't expired.

The interest rate applicable to the loan will depend on your choice of on-lender.

No personal guarantee and no security are required for loans of up to €500,000. Loans greater than €500,000 may be secured; however, a personal guarantee may only be sought in circumstances where it is required to capture supporting security, or where it is an uncollateralised personal guarantee, and it is limited to a maximum of 20% of the loan amount.

Yes. You can get more than one loan provided that the total of those loans does not exceed the maximum loan amount available under the COVID-19 Loan Scheme.

The maximum amount of loan(-s) you can get under the scheme is €1.5 million (€1.4 million for Small Mid-Caps).

Under the COVID-19 Loan Scheme loans can be used to fund working capital and investments in the business.

The refinance of existing debt products is limited to a maximum of 30% of the new loan amount; however, this cannot include the refinance of any loans from the COVID-19 Credit Guarantee Scheme or the COVID-19 Working Capital Scheme.

In general, the purchase of property is excluded from the COVID-19 Loan Scheme. However, if a business is purchasing a premise for its own use, then this can be considered an eligible purpose. However, as the maximum term of loans under the Scheme is six years, it may be more advantageous for businesses to consider a longer-term product such as a commercial mortgage, which could provide terms of up to 15 years.

No. In line with other EU-supported schemes, the purchase of land is not an eligible purpose under the COVID-19 Loan Scheme.

Yes. The addition of commercial buildings (for example farm buildings) onto existing land is a permissible purpose for the COVID-19 Loan Scheme.

Yes. The purchase of new equipment is a permissible purpose under the COVID-19 Loan Scheme.

Yes, provided that each of these loans is less than €500,000. Loans greater than €500,000 may be secured.

Yes. The COVID-19 Loan Scheme allows for the refinancing of existing debts products up to maximum 30% of the new loan amount. However, this cannot include the refinance of any loans from the COVID-19 Credit Guarantee Scheme or the COVID-19 Working Capital Scheme.

State aid can occur whenever State resources are used to aid an entity engaged in economic activity that potentially could distort competition and trade.

The European Commission allows small amounts of State aid to be given to an entity as long as the aid complies with the De Minimis Regulation and remains below a certain threshold. Examples of sources of State aid may include funding under schemes from Department of Agriculture, Enterprise Ireland, Bord Bia or a Local Enterprise Office.

The maximum amount of de minimis aid any single recipient can receive is €200,000 (gross grant equivalent) over a three-year fiscal period. The total amount of de minimis aid given to a single recipient performing road freight transport for hire or reward cannot exceed €100,000 over a three-year fiscal period.

For loans under the COVID-19 Loan Scheme, the amount of de minimis aid which is provided to a borrower is determined by the size and duration of the loan under the De Minimis Regulation.

Please note that the de minimis aid is not equal to the total amount of the loan.

Whenever you receive State aid, you receive a letter from the State body that provided it. Examples of State aid granting bodies include Department of Agriculture, Enterprise Ireland, Bord Bia or the Local Enterprise Office.

NACE stands for the “Statistical Classification of Economic Activities in the European Community” and is the standard system used in the European Union for classifying business activity. NACE codes are divided into sectors, such as retail, manufacturing or services .

Access a searchable list of NACE Codes associated to the Covid-19 Loan Scheme here.

This means that the main presence of business is in the Republic of Ireland. The business must be based and have an address in the Republic of Ireland.

This is a person who is authorised to sign declarations on behalf of the business, for examples, the business owner or the CEO.

A Primary Producer is a person engaged in the production, rearing or growing of primary products including harvesting, milking and farmed animal production. It also includes fishing and the harvesting of wild products.

The COVID-19 loan is a variable rate loan; therefore the borrower is able to make-out-of course or accelerate repayments to their loan at any time during the life of the loan.

The approval of a loan under the COVID-19 Loan Scheme is subject to the on-lender's credit policy. The maximum loan amount might not be considered appropriate in every case by the on-lender. The full amount of the loan may have not been available due to the de minimis threshold.

If you are not satisfied with the reason given, you are initially encouraged to use the on-lender's appeals process.

If your chosen on-lender is a bank and your appeal is unsuccessful, you can avail of the services of the Credit Review Office.