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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure IE-2020-14/784 Updated – measures in Ireland

Credit guarantee scheme for COVID-19 for SMEs

Country Ireland , applies nationwide
Time period Temporary, 01 April 2020 – 31 December 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Roisin Farelly (IRN Publishing) and Eurofound
Measure added 25 April 2020 (updated 03 February 2022)

Background information

The purpose of the SME Credit Guarantee Scheme for COVID-19 is to encourage additional lending to SMEs by offering a partial Government guarantee (currently 80%) to banks against losses on qualifying loans to eligible SMEs. The Credit Guarantee Scheme does not substitute for conventional lending that would otherwise have taken place. This is a repurposing of an existing SME credit guarantee scheme designed to assist SMEs to remain in business through the COVID-19 crisis.

Content of measure

The Credit Guarantee Scheme can be used by businesses to obtain loans to support changes they need to make to their business in response to COVID-19. It facilitates lending by commercial banks to SMEs by indemnifying banks against potential losses incurred from the lending.

Eligible entities for the credit guaranteed loans are viable micro, small and medium sized enterprises (SMEs). The lending decisions are made by the banks and not subject to government intervention.

The Scheme is targeted towards companies who are unable to access credit because of inadequate collateral, difficulty of accessing credit due to novel business market or technology or requirements to refinance given exit of SME lenders from the Irish market.

Loan facilities can be from €10,000 up to €1 million for terms of up to 7 years with the possibility of a three to six-month interest-only payment period (depending on the total loan duration). Borrowing SMEs pay an interest rate premium of 0.5% per annum (initially in 2019/20; rate may vary thereafter) to partially cover the state costs of the guarantee.


The following updates to this measure have been made after it came into effect.

26 March 2021

The Government extended the scheme until the end of 2021.

It said over 5,000 businesses had applied for the scheme and that the majority of businesses using the Scheme are those with under ten employees, in the Retail, Accommodation, Construction and Agriculture sectors.

The scheme was also expanded beyond retail banks to other lenders, including 19 credit unions spread between three groups and non-bank lenders. The Government welcomed this and said as a result more SMEs will be able to access credit from an increased diversity of sources in both bank and non-bank credit.

07 September 2020

The scheme has been opened on 7 July 2020 to provide loans to SMEs, micro-businesses and small mid-caps, expanded to include primary producers in agriculture and fisheries. It has also been expanded to include unsecured loans of up to €250,000.

Businesses will be required to declare that their turnover or projected turnover has been reduced by 15% as a result of COVID-19. The scheme will provide medium to long term liquidity finance and loans will range from €10,000 to €1,000,000. The loans will be available to the end of 2020.

It provides an 80% Government guarantee to participating banks, which initially will be AIB, Bank of Ireland and Ulster Bank. It is situated between the shorter-term COVID Working Capital scheme and the long-term Future Growth Loan Scheme.

It operates under the State Aid Temporary Framework in response to COVID-19.

Use of measure

According to the Department of Enterprise, Trade and Employment: 3,285 applications were received for the scheme. As of 31st December 2020, 1,890 were approved with a total value of €98.19 million.

According to the Irish Times in January 2021, seven of the Republic’s largest credit unions and three non-bank lenders have signed up to participate in the Scheme. The scheme, initially launched through AIB, Bank of Ireland and Ulster Bank.

The Government announced in March 2021 that over 5,000 businesses had applied for the scheme and that the majority of businesses using the Scheme are those with under ten employees, in the Retail, Accommodation, Construction and Agriculture sectors.

According to the COVID-19 Credit Guarantee Scheme Performance Reports, at the end of September 2021, 6,873 loans had been issued with a total value of €450.63 million. The main sectors availing of the scheme include accommodation and food services, agriculture, forestry and fishing and wholesale and retail.

According to the COVID-19 and Brexit Business Supports Tracker 2022, 8,780 loans had been sanctioned / drawn down to a value of €611.08 million, as of 16 December 2021.

Target groups

Workers Businesses Citizens
Does not apply to workers SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown


Social partners not involved - this is a national Government initiative.

Views and reactions

No involvement.


  • 25 April 2020: Department of Business Enterprise and Innovation (
  • 07 September 2020: Credit Guarantee Scheme Press Release
  • 14 January 2021: Seven credit unions join Covid-19 loan guarantee scheme (
  • 26 March 2021: Government agrees extension to €2bn Credit Guarantee Scheme (
  • 23 September 2021: Performance Report on Covid-19 Credit Guarantee Scheme to the Department of Enterprise, Trade and Employment (
  • 24 September 2021: COVID-19 and Brexit Business Supports Tracker 2021 (
  • 07 January 2022: COVID-19 and Brexit Business Supports Tracker 2022 (


Eurofound (2020), Credit guarantee scheme for COVID-19 for SMEs, measure IE-2020-14/784 (measures in Ireland), EU PolicyWatch, Dublin,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.