SME Credit Guarantee Scheme (CGS)

Phase: Anticipation
  • Access to finance
  • response to COVID-19
  • Support for digitalisation
  • Fostering innovation
  • Support of SMEs
Last modified: 23 July, 2020
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SME Credit Guarantee Scheme (CGS)

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SME Credit Guarantee Scheme (CGS)


The Credit Guarantee Scheme (CGS) is operated by the Strategic Banking Corporation of Ireland (SBCI) and is targeted at supporting SMEs. Loans for eligible SMEs can be between €10,000 and €1,000,000, and run for up to seven years.

SMEs may be eligible if they:

  • Are involved in a commercial activity;
  • Are a sole trader, partnership, franchise, cooperative or limited company;
  • In the lender’s opinion have a viable business proposal;
  • Are able to repay the facility.

SMEs which fall into one of these criteria are not eligible:

  • SMEs involved in primary production in agriculture, horticulture and fisheries;
  • SMEs engaged in property-related activities;
  • SMEs seeking refinancing of existing debts.

Main characteristics

The Credit Guarantee Scheme (CGS) aims to assist viable SMEs, which under normal lending criteria are unable to borrow from their bank, in accessing credit. The scheme operates by providing an 80% guarantee to participating finance providers (currently AIB, Bank of Ireland and Ulster Bank) on qualifying loans to SMEs.

The CGS addresses three barriers which SMEs face when lending:

  • Inadequate collateral;
  • Novel business market, sector or technology which is perceived by finance providers as higher risk under current credit risk evaluation practices;
  • Need for refinancing caused by the exit of an SMEs lender from the Irish market.

The scheme is operated on behalf of the Department of Business, Enterprise and Innovation (D/BEI) by the Strategic Banking Corporation of Ireland (SBCI). SMEs encountering one of the three barriers above listed, can approach any one of the participating banks and apply for a loan facility under CGS.


  • National funds
  • European funds

Involved actors

National government
Department of Business, Enterprise and Innovation (D/BEI)
Strategic Banking Corporation of Ireland (SBCI)


The revised SME Credit Guarantee Scheme was launched by the Government in 2018, succeeding the 2012 and 2015 schemes. 

Since 2018, there has been an increased uptake of loans through the CGS. A 2019 Indecon evaluation showed the rate of sanctioned loans increased signficantly since Q2 2018. In the nine months from Q3 2018 to Q1 2019, the average amount of quarterly total loans was €6,230,000. The average quarterly total loans through the CGS for the two years prior to Q3 2018 was €4,265,000.

92% of loans are given to micro and small enterprises, accounting for €92,000,000 of CGS sanctioned loans, at an average amount of €138,900 per company. A majority of this activity is seen in the East of the country. 


The increase in uptake since Q3 2018 suggests the CGS has become more adept and responsive for SMEs. Since July 2019, the premium rate on CGS loans was reduced from 1% to 0.5%. This was a specific measure to address challenges posed by Brexit. The government is also encouraging the CGS as part of its responses to help businesses affected by the COVID-19 pandemic.



Brexit is a major challenge for many businesses in the border region and midlands, but CGS activity in these regions is lower than others. That is not to say the CGS is not effective in these regions; it might just be worth further consideration. 


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