News & Events

Minister Damien English introduces COVID-19 Credit Guarantee Scheme legislation to Dáil Éireann

  • Largest guarantee scheme for businesses in the history of the State
  • Scheme for businesses to survive, grow and thrive
  • Supports extended to companies which employ up to 499 people

Today the Government introduced the Credit Guarantee (Amendment) Bill to the Dáil at second stage, an important step in bringing into effect the €2 billion COVID-19 Credit Guarantee Scheme (CGS). This will ensure the availability of loans of up to six years at a discounted rate with the State acting as guarantor for 80% of each individual loan. It is expected that overdrafts, term loans and working capital loans will be the predominant products within the COVID-19 CGS. It will initially be available through the participating finance providers in the current CGS; being AIB, Bank of Ireland and Ulster Bank. An open call will be issued through the Strategic Banking Corporation of Ireland for other finance providers to join, subject to these providers meeting the eligibility criteria.  

This Scheme will give confidence to small businesses by providing liquidity supports at a time when many need funding to re-engage with their suppliers and customers. It is the largest guarantee scheme for businesses in the history of the State and demonstrates the commitment of the Government in helping Irish SMEs, small Mid-Caps (employing up to 500 employees) and primary producers.

Minister English stated that

“The introduction of the Credit Guarantee (Amendment) Bill is an important step by Government and the Department for Enterprise, Trade and Employment to assist businesses. This is a cornerstone support for businesses as part of the July Stimulus. The Government has always had loan supports and grants available for businesses, especially for SMEs. However, we now must ramp up supports for businesses adversely affected by Covid-19. 

The COVID-19 CGS legislation, once passed, will ensure the availability of much needed liquidity for borrowers in the short to medium term and will help support and sustain the funding requirements of many small businesses in Ireland.

Significantly the COVID-19 CGS legislation will extend lending supports to allow for small mid-cap enterprises, which employ up to 499 people, to be included. It is worth noting also that Primary producers (farmers and fishers) are included in this legislation and will be allowed to access the Credit Guarantee Scheme.

The COVID-19 CGS will help keep businesses afloat, maintain and create employment levels, allow businesses to continue offering their services and products that keep the very fabric of communities throughout Ireland alive.

More so than ever before we need businesses to survive, grow and thrive as the economy and society emerges from Covid-19.  For the greater good, huge numbers of businesses closed to stave off the worst of this pandemic. Now, the Government will step up to provide essential support to help get these businesses back on their feet”.

The Minister for Agriculture, Food and the Marine Dara Calleary TD stated

‘‘I welcome the inclusion of farmers and fishers in the new Credit Guarantee Scheme.

As Ireland moves through the current public health emergency, I think it is important and prudent that we begin to prepare for what will hopefully be the recovery phase. It is crucial that we address the financial needs of all businesses, including those in the agri-food sector.

Like many businesses, our farmers, fishers and food companies have played a vital role during the pandemic, keeping quality food and beverages supplied to all our customers, both in Ireland and internationally.

The agri-food sector, encompassing all the many aspects of agriculture, seafood and forestry, play a vital role in our economy, and are especially important in rural and coastal areas.

Therefore, it is crucial that we support them and all our businesses, as we look to future balanced growth across our economy.’’


The COVID-19 Credit Guarantee Scheme (CGS) has been designed to address the extraordinary impacts of the immediate and significant decrease in economic activity. This global, national and local shock to Irish businesses affects viable but vulnerable firms that operate and employ workers throughout every region of the State. 

SMEs, primary producers and small Mid-Caps with employment up to 499 have an immediate and urgent need for liquidity in order to meet ongoing expenses and to prepare for a return to more normal economic trading conditions. A significant and ambitious credit guarantee scheme will assist lenders in providing liquidity to these companies and send a strong signal of support and confidence to both lenders and borrowers.

A loan guarantee scheme such the COVID-19 CGS leverages more of the State’s resources and is less costly than a grant-based scheme. It has the capacity to enable lenders to provide and /or to continue to provide urgently needed liquidity to SMEs, primary producers and small Mid-Caps, which in turn will sustain employment in vulnerable sectors throughout the country. It also leverages the knowledge and lending experience of lenders with respect to their customers. 

The COVID-19 CGS will enable businesses to continue, or to return to, trading activity more quickly than would otherwise be the case and thereby assist economic recovery. It will facilitate the ongoing working capital requirements of affected businesses and assist their reintegration into supply chains both domestically and internationally. 

Features of the COVID-19 CGS

The recommended features have been chosen with the objective of maximising the impact of the scheme for borrowers in the short to medium term and addressing their liquidity requirements. The main features are as follows:

  • This is a scheme for SMEs, Primary Producers and small Mid-Caps (defined as businesses with up to 499 employees). SMEs are expected to be the main beneficiaries.
  • In order to qualify for the Scheme, the borrower will have to declare an adverse impact of minimum 15% of actual or projected turnover or profit due to the impact of COVID-19.
  • The amount available under the COVID-19 CGS is €2 billion.
  • A guarantee rate of 80% for the State with the lenders retaining 20% of the risk of the loan.
  • The removal of any portfolio cap for individual lenders. A portfolio cap has been a feature of previous CGS. However, the removal of the cap for the COVID-19 CGS is essential in order to ensure lenders provide an interest rate reduction to borrowers and also comply with the Capital Requirements Regulation. 
  • The current standard facility size of €10k to €1 million under the current Acts will remain for the COVID-19 CGS.
  • The products covered under the scheme will include a broad range of credit facilities including overdrafts, working capital and term loan facilities. 
  • The scheme will permit lenders to refinance and rollover credit facilities.  However, lenders will not be permitted to end existing credit facilities (including overdrafts) early or prematurely in order to artificially engineer access to the COVID-19 CGS.
  • Capital and/or interest moratoria for specific periods of time (up to one year) will be permitted under the Scheme but any decision regarding such moratoria will be at the discretion of the individual lender based on their assessment of their customer. 
  • The new Scheme has been prepared in order to comply with the terms of the European Commission’s Temporary State Aid Framework. In particular:
    • Primary agricultural, fisheries and aquaculture producers may be included.
    • A guarantee premium on each loan under the Scheme is required to be paid in addition to interest rate costs (0.25% in the first year, 0.50% in years two and three and 1% in years four, five and six).
    • The scheme will be timebound and will be available initially until 31 December 2020.
    • The rollover of loans will be facilitated but no loan included in the Scheme can extend beyond 31 December 2026. 
    • The size of the loan is linked to business turnover (25% of 2019 turnover) or wage costs (double annual wage bill in 2019). The borrower and lender must demonstrate that the loan is compliant with this.


The Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the Government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The Department has lead responsibility for Irish policy on global trade and inward investment and a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.

For further information please contact Press Office, D/Business, Enterprise and Innovation, or (01) 631 2200.

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