Dáil Éireann Debate, Tuesday - 1 December 2020
132. Deputy Pearse Doherty asked the Tánaiste and Minister for Enterprise, Trade and Employment the average interest rates across lenders providing loans to qualifying borrowers through the Covid-19 credit guarantee scheme; and if he will make a statement on the matter. [39868/20]
View answerThe COVID-19 Credit Guarantee Scheme was launched by Government on the 7th September and is the biggest ever state-backed loan guarantee Scheme in Ireland.
The Scheme provides an 80% State guarantee on lending until the end of this year, for terms between 3 months and five and a half years and offers a range of lending products between €10,000 and €1 million including working capital and term loan facilities. Loans up to €250,000 are unsecured.
This Scheme provides support to those businesses that have been negatively impacted as a result of the outbreak of COVID-19. It provides critical support to ensure businesses are facilitated in having access to credit facilities to assist in their trading needs. It is available to SMEs, small Mid-Caps and primary producers.
As a result of the high level of the State guarantee, loans are being provided at interest rates lower than the current market rate for similar loans. Interest rates can vary across lenders and also vary depending on the size and term of the loan. The latest data available in respect of interest rates charged on drawn loans shows that interest rates range from 2.75% to 3.95% with mode and median rates of 2.75% and a mean rate weighted on the basis of the number of loans drawn of 2.78%. These are significantly reduced rates on commercial loans rates of the same term and size.
Officials from my Department will continue to monitor interest rates charged to ensure they are within the terms agreed under the guarantee agreements with the individual lenders.
