SME Credit Guarantee Scheme (CGS)

What is the Credit Guarantee Scheme?

The revised SME Credit Guarantee Scheme was launched by the Government in 2018 and replaced the previously successful 2012 & 2015 schemes. The Scheme aims to assist viable SMEs, which under normal lending criteria are unable to borrow from their bank, in accessing credit. The scheme operates by providing an 80% guarantee to participating finance providers (currently AIB, Bank of Ireland and Ulster Bank) on qualifying loans to SMEs.

The scheme has been designed to address three barriers to lending:

  • Inadequate collateral
  • Novel business market, sector or technology which is perceived by finance providers as higher risk under current credit risk evaluation practices
  • Need for refinancing caused by the exit of an SMEs lender from the Irish market

The Scheme is operated on behalf of the Department of Business, Enterprise and Innovation (D/BEI) by the Strategic Banking Corporation of Ireland (SBCI) and is available from the participating banks (AIB, Bank of Ireland and Ulster Bank). If you are an SME and you are encountering one of the 3 barriers set out above, you can approach any one of the participating banks and apply for a loan facility under CGS.

Credit Guarantee Scheme and Covid-19

To help SMEs impacted by Covid-19 related issues have access to sufficient working capital, the Government has repurposed the Credit Guarantee Scheme (CGS) to provide counter guarantees to the banks, mitigating credit risk or need for collateral. The Credit Guarantee Scheme can be used by businesses to obtain loans to support changes they need to make to their business in response to Covid-19. 

Key Features of the Scheme:
  • Facilities of €10,000 up to €1m
  • Terms of up to 7 years
  • Term Loans, Demand Loans and Performance Bonds

Reforms to the Scheme were provided for in 2016 amending primary legislation that led to the revision of the Credit Guarantee Scheme. This legislation allows new products to be rolled out by the SBCI in 2018 and following years, including the extension of the Scheme to cover loans other than traditional bank loans (i.e., invoice discounting, factoring, lessors etc).

State Aid rules apply to the scheme, full details of these available at

Who is eligible for the Scheme?

SMEs may be eligible if they:

  • Are involved in a commercial activity
  • Are a sole trader, partnership, franchise, co-operative or limited company
  • In the lender’s opinion have a viable business proposal
  • Are able to repay the facility

Some exclusions apply, full details of these at

SMEs may avail of a Credit Guarantee Scheme facility subject to approval by the relevant lender.

How much does the scheme cost?

The scheme allows for a maximum of a 2% annual premium to the Government in addition to the interest rate/fee charged by the participating bank..

As of 14th July 2019, the Premium Rate charged has been reduced from the current rate of 1% down to 0.5% for a period of 12 months.

Who makes the credit decision?

The lender is ultimately responsible for the credit decision. 

If declined, the SME has the option of (1) using the lender’s internal appeals mechanism and (2) if the original decline decision is upheld referring the decision to the Credit Review Office 

How to apply do for the scheme 

The scheme is available through participating lenders AIB, Bank of Ireland and Ulster Bank


Bank of Ireland

Ulster Bank 

For additional information on other Government supports go to

Enterprise Ireland Supporting SMEs