Doherty welcomes €2bn in low cost loans for Covid-19 impacted businesses

The new Covid-19 Credit Guarantee Scheme (CGS) will make low cost loans available to businesses in Meath impacted by the pandemic.

As with other credit guarantee schemes, the Covid-19 CGS will be operated by the Strategic Banking Corporation of Ireland and will be available through three banks; AIB, Bank of Ireland and Ulster Bank. There will be an Open Call in due course.

The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar T.D. stated “We want to help viable businesses to get through the difficult phase of reopening and deal with the new realities and challenges posed by Covid-19. The Credit Guarantee Scheme will provide low cost loans to businesses and will in turn help more people to get back to work.

“The changes being made to this Scheme will bring our offering into line with similar schemes across Europe. We want to give confidence to SMEs in particular, by providing the liquidity needed to get through the economic upheaval caused by the pandemic. This Scheme complements the other actions taken to date by Government, including direct grants to businesses, the warehousing of tax liabilities and commercial rates waivers. The July Stimulus Package will be the next step in our recovery plan as we seek to get businesses back on their feet and our people back to work.”

Today's annoucement was welcomed by Leader of the Seanad Regina Doherty who said the scheme "will ensure that our small and medium size enterprises and our primary producers here in Meath can access liquidity to keep their businesses operating, as our economy continues to re-open and more and more people get back to work. It will be available for a wide range of products including overdrafts, term loans and working capital."

As Leader of Seanad Éireann, Doherty has committed to getting the legislation through the various stages of the Oireachtas next week, allowing for its swift enactment.

“The changes being made to this Scheme will bring our offering into line with similar schemes across Europe,” Doherty said.

The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar said: “We want to give confidence to SMEs in particular, by providing the liquidity needed to get through the economic upheaval caused by the pandemic.”

The Small Print:

Legislative changes are needed to the existing Credit Guarantee Act 2012 (as amended) to put in place the extra measures for the Covid-19 Credit Guarantee Scheme.

These changes allow the removal of the portfolio cap and also increase the size of the scheme to take account of the needs of business to respond to the economic challenges brought on by the Covid-19 pandemic.

The current Credit Guarantee Scheme has a portfolio cap in place for individual finance providers which limits the State’s exposure to 13% of the loan facilities included in the scheme.

The Government decision removes any portfolio cap for credit facilities provided by each finance provider. The risk share of 80% for the State and 20% for the finance provider remains in place.

Removal of the portfolio cap is essential in order to ensure lenders provide much needed liquidity to businesses and signals the strength of the Government’s policy response to the unprecedented health pandemic and economic crisis. Restoring liquidity to borrowers will be a critical feature of economic recovery.

As with other credit guarantee schemes, the Covid-19 CGS will be operated by the Strategic Banking Corporation of Ireland and will be available through three banks; AIB, Bank of Ireland and Ulster Bank. There will be an Open Call in due course.