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SBCI COVID-19 Working Capital Scheme FAQs

Is the scheme available for applications?

Eligibility applications for the Covid-19 Working Capital Scheme are now being accepted through the SBCI website at sbci.gov.ie.

If this scheme is not suitable, businesses may wish to consider the Credit Guarantee Scheme and the Microfinance Ireland Covid-19 Business Loan.

What is working capital?

Working capital is a measure of the short-term liquidity of a business, finances the day to day running of a business. This includes cashflow for operational purposes. 

What are the scheme eligibility criteria?

To qualify for eligibility to the scheme, businesses need to meet one criterion related to the impact of COVID-19 on their business and one innovation criterion as per EIF standard conditions. The details of the criteria can be found at sbci.gov.ie.

Who can apply to the scheme?

Viable micro, small and medium sized enterprises (SMEs) and Small Mid-Cap enterprises that meet the eligibility criteria.

SMEs are defined by the Standard EU definition [Commission Regulation 2003/361/EC] as enterprises that:

  • have fewer than 250 employees
  • have a turnover of €50 million or less (or €43 million or less on their balance sheet)
  • are independent and autonomous i.e. not part of a wider group of enterprises
  • have less than 25% of their capital held by public bodies
  • is established and operating in the Republic of Ireland

A Small Mid-Cap is an enterprise that is not an SME but has fewer than 500 employees

Business with up to 499 employees can apply for eligibility to the scheme.

Who cannot apply to the scheme?

SMEs/Small Mid-Cap that:

  • are involved in the primary agriculture and/or aquaculture sector
  • are in financial difficulty (excluding cashflow pressures caused by COVID19 virus impact)
  • are bankrupt or being wound up or having its affairs administered by courts
  • in the last 5 years has entered in to an arrangement with creditors, in the context of being bankrupt or wound-up or having its affairs administered by the courts
  • are convicted of an offense concerning professional misconduct by judgement, fraud, corruption, involvement in a criminal organisation, money laundering or any other illegal activity where such illegal activity is detrimental to the European Union’s financial interests.  

How much can my business borrow under the scheme?

Loans of €25,000 up to €1.5 million can be applied for under the scheme.

Is there an interest-only option?

You may be able to avail of a three-month interest-only payment period (depending on your lender’s assessment of your application).

Do I need to provide security for a loan?

For loans of up to €500,000 no security is required.

What is the interest rate on these loans?

The interest rate charged on these loans is at the discretion of the participating banks but is limited at a maximum of 4%. The interest rate is fixed for the period of the loan.

What is the loan period under the scheme?

Loans are for periods of up to 3 years in duration. 

Is there a closing date for the scheme?

While there is no prescribed closing date for the scheme at present, applicants are urged to avail of this finance as soon as possible in the context of their business needs. 

Do I have to undertake an innovation activity to be eligible for the scheme?

Depending on your previous and planned activities, there are different ways for which your businesses may meet one of the 11 innovation criteria for the COVID19 scheme, including:

  • your business has been active in innovation in the past (Criteria 3, 4, 5, 6, 7,11)

  • you are considered an innovative business (Criteria 8, 10)

  • your business is seeking to enter new markets (Criteria 2)

  • your business wants to access finance in order to produce, or develop, or implement, new or significantly improved products or business processes (Criteria 9) or to undertake research and innovation activities associated with your response to the COVID-19 challenge (Criteria 1)

It is noted that in a similar scheme operated by the SBCI for Brexit impacted businesses, of the applications to date for eligibility to that scheme, less than 1% have been declined due to not meeting the innovation criteria.

What is meant by innovation?

The term innovation has a broad definition. In applying to the scheme, businesses should take the meaning of innovation in the broad sense and not be limited to considering innovation as only technology-based or R&D-based. Rather businesses should also consider innovations in the context of adaptations, changes and developments they have made/plan to make across their products (goods and services) and also their business processes [such as distribution and logistics, marketing, sales and after-sales services; information and communication technology (ICT) services to the business, administrative and management functions, engineering and related technical services to the business, and product and business process development].

How do I apply for a loan under the scheme?

There is a two-step process in place to apply for a loan: 

  • confirm your eligibility by completing the Eligibility Application form which is available at sbci.gov.ie. You will receive an eligibility letter if your application is successful. This eligibility letter is not a guarantee of loan approval.
  • once you receive confirmation that you are eligible, engage with the bank(s) to begin their standard loan application process. It is only at this stage that a decision will be made on credit approval. 

Do I need to submit a business plan?

As part of the application process, applicants must submit a business plan demonstrating the means by which they intend to innovate, change or adapt in response to this new challenge. However, this process is not onerous.

How soon do I need to apply for a loan after receiving my eligibility code?

While eligibility codes remain valid for six months, in order to manage demand for the scheme, applicants are asked to apply for loans as soon as practicable in the context of their business needs. 

What should I do if I decide after receiving an eligibility code, that I do not want to proceed with a loan?

If a business decides not to proceed with a loan application, please inform SBCI. 

What is state aid?

State aid is the term used for support given to an entity (business) engaged in economic activity using state funds that could potentially distort competition and affect trade between member states, and is generally prohibited because of its anticompetitive nature. The De Minimis Regulation is an EU mechanism to provide small amounts of aid, which is considered to have no effect on trade and therefore not State aid.

What is de minimis state aid?

A single entity (business) can receive De Minimis aid up to a €200,000 threshold over a three year period from a number of sources. The threshold for a road freight transport business is €100,000.   For loans under this scheme, the amount of De Minimis aid provided to a borrower is calculated based on the size and duration of the loan and the difference between the interest rate charged and the current commercial interest rate.

How do I know if I have already received de minimis aid?

You will be required to self-declare if you have received De Minimis aid in the previous three years. If you have received De Minimis aid from other state bodies such as Enterprise Ireland, Bord Bia or your Local Enterprise Office (LEO) this will be referred to in the grant letters you received.

Can I get guidance on the application process?

You can get guidance on the application process, innovation and Covid-19 criteria and business plans through the SCBI’s Covid-19 WCS helpline at 1800 804482.

Where can I learn more?

The SBCI website sbci.gov.ie has full information on the scheme.