SME Credit Guarantee Scheme (CGS)

What is the Credit Guarantee Scheme?

The scheme is a Government initiative that was set up to encourage additional lending to commercially viable SMEs which, under normal lending criteria, are unable to obtain new or additional facilities from their bank. The scheme facilitates this by providing banks (current participating lenders are AIB, Bank of Ireland and Ulster Bank) with a Government-backed guarantee for 75% of the facility value. The scheme is intended to address three distinct barriers to lending;

  • Inadequacy of collateral,
  • where an SME is seeking to refinance due to its bank exiting the Irish market and there is insufficient collateral available to support this refinancing
  • Growing or expanding businesses which operate in sectors which are perceived as higher risk under current credit risk evaluation practices
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

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 2% annual premium 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, AIB, Bank of Ireland and Ulster Bank.

For additional information on other Government supports go to