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 previous 2012 scheme. 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 a 80% guarantee (previously 75%) to participating finance providers (currently 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 (DBEI) by the Strategic Banking Corporation of Ireland (SBCI) and is available from the participating banks (Bank of Ireland, Ulster Bank). If you are an SME, and are encountering one of the 3 barriers set out above, you can approach one of the participating banks and ask for a loan under the Scheme.

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

SBCI Loans and the Credit Guarantee Scheme – can you do both?

SMEs may avail of both an SBCI loan and the Credit Guarantee Scheme, subject to approval by the relevant lender. SMEs may apply for an SBCI loan, and if they are declined, or are offered a facility that does not meet their needs for the reasons detailed above, may be offered an SBCI loan under the Credit Guarantee Scheme. Using both products allows the SME to avail of lower cost SBCI funding while providing the assurance of the Credit Guarantee Scheme to the lender.

How much does the scheme cost?

The SME borrower pays a maximum 2% annual premium (currently 1%) to the Government in addition to the interest rate/fee charged by the bank. For the SME, the lower cost of the SBCI loan will partially offset the cost of the premium of the Credit Guarantee Scheme.

Who makes the credit decision?

Similar to SBCI funding, the lender is ultimately responsible for the credit decision. In the event of a decline the SME has the option of (1) using the lenders internal appeals mechanism and (2) if the original decline decision is upheld referring the decision to the Credit review Office

How to apply for the scheme

The scheme is available through SBCI on-lending partners Bank of Ireland and Ulster Bank.

For additional information on other Government supports go to