SBCI Covid-19 Working Capital Loan Scheme
The SBCI Covid-19 Working Capital Scheme is offered in partnership with the Department of Business Enterprise and Innovation, the Department of Agriculture Food and the Marine and is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments.
The loans will be available through AIB, Bank of Ireland and Ulster Bank. Approval of loans are subject to the banks own credit policies and procedures. It should be noted that businesses cannot complete a loan application until they have received their eligibility letter from the SBCI.
- Loan amounts of between €25,000 to €1.5m per eligible enterprise (see the State Aid section below for further details).
- Maximum interest rate of 4%.
- Loan terms ranging from 1 year to 3 years.
- Loans unsecured up to €500,000.
- Optional interest-only repayments may be available at the start of the loans.
- The loan amount and term is dependent on the loan purpose.
Loans can be used for
- Future working capital requirements.
- To fund innovation, change or adaptation of the business to mitigate the impact of Covid-19.
Loans cannot be used for
- Refinance of undertakings in financial difficulties.
- Refinance of existing debt (e.g. Terms Loans/Leases/Hire Purchase etc.).
Who can apply
Viable micro, small and medium sized enterprises (SMEs) and Small MidCap 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
Who cannot apply
SMEs/ Small Mid-Cap that: –
- Are involved in the primary agriculture and/or aquaculture sector
- Are in financial difficulty (excluding cashflow pressures caused by Covid-19 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.
SMEs/ Small Mid-Cap must satisfy the Covid-19 Criterion and one of the innovation criteria: –
The business is impacted by the Covid-19 virus resulting in business turnover/profitability being negatively impacted by a minimum of 15%.
Innovation Criteria (Choose one of the following criteria)
Please note that an up to date business plan will be required to be provided to the finance provider(s) in all cases when applying for a loan.
If you select criterion No. 3, 4, 5, 6,7,8, 10 or 11 you will also be required to provide the other document detailed in that criterion to the SBCI as part of this application.
1. At least 80% of the Scheme Loan will be spent on research and innovation activities associated with your response to the COVID-19 challenge with the remainder on costs necessary to enable such activities.
Evidence required from applicant: The business plan given to the finance provider must reflect the details of the expenditures and activities to be undertaken.
2. You intend to enter a new product or geographical market, and the required investment is higher than 50% of average annual turnover in the preceding 5 years.
Evidence required from applicant: The business plan given to the finance provider must reflect details of the expenditures.
3. You will have registered at least one technology right in the last 24 months and the purpose of the loan is to enable use of this technology right.
Evidence required from applicant: Evidence of technology right e.g. patent, utility model, design right, protection certificates.
4. You are an SME and research and innovation costs represent at least 10% of total operating costs in at least one of the last three years preceding this application, or in the case where there is no financial history, as per current financial statements.
Evidence required from applicant: Costs to be certified by an accountant practising in the Republic of Ireland.
5. You are a Small Mid-Cap and research and innovation costs represent either: –
a. at least 15% of total operating costs in at least one of the three years preceding this application.
b. at least 10% per year of total operating costs in the three years preceding this application.
Evidence required from applicant: Costs to be certified by an accountant practising in Republic of Ireland.
6. You have been awarded a Research and Development or Innovation prize by an EU Institution or EU Body over the last 24 months.
Evidence required from applicant: Appropriate evidence of prize.
7. You have received a grant, loan or guarantee from a European research and innovation scheme (e.g. Horizon 2020 or FP7) or regional/national research or innovation support scheme in the last three years, and are confirming that the loan is not covering the same expense
Evidence required from applicant: Appropriate evidence of the grant, loan or guarantee.
8. You are an early stage SME and have received an investment over the last 24 months from a venture capital investor or business angel.
Evidence required from applicant: Appropriate evidence of the investment to be provided.
9. You intend to use the loan to invest in producing, developing or implementing new or substantially improved products, processes or services or production or delivery methods (including business models) that are innovative, and where there is a risk of technological, industrial or business failure as evidenced by an external expert.
Evidence required from applicant: The business plan must demonstrate those risks of failure and evaluated by an external expert e.g. an accountant, engineer, the finance provider.
10. You are a “fast growing enterprise” operating for less than 12 years with an average annualised employee or turnover growth greater than 20% a year, over a three year period and with ten or more employees at the beginning of that period.
Evidence required from applicant: Evidence to be certified by an accountant practising in Republic of Ireland.
11. You are operating in a market for less than seven years and research and innovation costs represent at least 5% of total operating costs in at least one of the three years preceding the loan application or in the case of an enterprise (and particularly a startup) without any financial history, according to current financial statements.
Evidence required from applicant: Costs to be certified by an accountant practicing in Republic of Ireland.
Loans in this Scheme are subject to the De Minimis state aid threshold of €200,000 per undertaking received in the last three year fiscal period – i.e. the current year and the previous two years. The total amount of de minimis aid given to a single recipient performing road freight transport for hire or reward cannot exceed €100,000 over a three year fiscal period. If an enterprise has received state aid during this period it may not be able to avail of the maximum loan amount of €1,500,000 but may be able to avail of a lower loan level. For example, if an undertaking has received a grant of €160,000 during the preceding three year fiscal period and then applies for a 3 year loan of €700,000 under the Scheme, it would incur an amount of €44,800 of state aid thereby exceeding the €200,000 state aid threshold. Options for the undertaking would be to reduce either the amount or the term of the loan being sought. To identify the amount of state aid incurred for each loan amount and term, see the State Aid Matrix here.
State Aid is defined as any aid granted by a member state or through state resources (any state body, agency or department). State Aid incurred is not equal to the amount of the loans.
State Aid (See Regulation for further details)
How to apply for a loan?
The SME/ Small Mid-Cap must first complete the Eligibility Application Form to check if they are eligible to apply to the bank(s) for a loan under the Scheme.
If an SME/ Small Mid-Cap is eligible they will receive a letter of confirmation from the SBCI which they then present to the bank(s), as part of the credit application process.
When are the SBCI Covid-19 Working Capital Loan Scheme Loans available
- Applications for loan eligibility can be made from 23 March 2020
- Loan applications can be made to financial providers once the eligibility letter is received.
- The Scheme operates from March 2020 to March 2021 or until the scheme has been fully subscribed.
Where to apply for a loan?
The following Banks will be offering SBCI Covid-19 Working Capital Loans