The COVID-19 Credit Guarantee Scheme (CCGS) has €2 billion in lending available for Irish businesses and is the largest guarantee scheme in the history of the State. Its function is to add certainty to businesses that funding is available for working capital and investment purposes. Loans of up to €1 million are available for up to five and a half years at reduced interest rates. Loans under €250,000 do not require collateral or personal guarantees. The Scheme is available to SMEs, small Mid-Caps and primary producers.
While the State provides a guarantee on these loans, the Department plays no role in the application or decision-making process in relation to loans offered under the Scheme, which, is fully delegated to the participating lenders. There are clear eligibility criteria set out in the lending terms, including a minimum impact of 15 percent on turnover as a result of COVID-19 and a return to viability in the future. These features were set by the European Commission in their State Aid Temporary Framework. The CCGS must operate in accordance with this Framework. Private finance providers have the widest network and closest relationship with Irish businesses to make these assessments.
Where an applicant has had a loan application refused, they may wish to appeal the decision to the Credit Review Office (CRO). The CRO helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks. This is a strictly confidential process between the business, the Credit Review and the bank.
My Department has worked extremely hard to ensure there is choice out in the market for Irish businesses seeking state supported lending. Since January, 19 Credit Unions and 3 non-bank lenders have successfully joined the CCGS as finance providers. More are expected to be announced in the coming weeks. This long-term policy goal of diversification will add competition in the market and ensure a wide range of loan products being available. I encourage businesses to check out the CCGS pages on the Strategic Banking Corporation of Ireland’s website for a full list of participating finance providers.
I want to assure the Deputy that I and my officials are monitoring the Scheme and its effectiveness. Data is being published on a monthly basis on my Department website regarding the level of lending through the scheme, the sectoral breakdown and the uptake on a county basis.