Low-cost finance to fund working capital and investments for businesses, including primary producers, impacted by the economic consequences of the conflict in Ukraine.
Introduction
The Ukraine Credit Guarantee Scheme (UCGS) is offered by the Department of Enterprise, Trade and Employment (DETE) to provide viable SMEs including primary producers, impacted by economic challenges arising from the conflict in Ukraine with access to low-cost finance.
The scheme supports economic activity in Ireland, facilitating the provision of working capital and medium-term investment finance to businesses adversely impacted by the conflict in Ukraine who are facing supply chain disruptions and increased input (including energy) costs.
Borrowers will contribute to the cost of the scheme by paying a risk premium on the credit advanced. This premium will be incorporated into the margin on the loan, collected by the on-lender and paid to Government of Ireland.
Loan Features
- Loans from €10,000 to a maximum of €1,000,000 per borrower (subject to Loan Amount Criteria, see below for further details)
- Repayment terms of between 3 months up to 6 years
- Eligible financial products include (but are not limited to) term loan facilities, working capital, asset finance and overdrafts
- Loan amounts less than €250,000 will be unsecured (unless it is a requirement of the product feature e.g., asset finance, invoice discount facilities)
- Amounts greater than €250,000 may be secured; however, a personal guarantee may only be sought in circumstances where it is required to capture supporting security, or where it is an uncollateralised personal guarantee and is limited to a maximum of 20% of the initial finance agreement amount
- Up to 90 days interest and/or capital moratoria are possible under the scheme. These remain at the discretion of the participating on-lender.
- Loans will be available up to the 31 December 2024 or until the scheme has been fully subscribed.
Interest Rate
5.5%
How to apply
STEP 1 – Applicants must first register on the SBCI Hub and submit an online Eligibility Application Form to check if they can access the scheme. Once the online form is completed, successful applicants will be issued with an eligibility code.
STEP 2 – The applicant must provide this eligibility code to Savvi Credit Union to begin their credit application process.
Please note that the SBCI eligibility code is not a guarantee of credit approval and does not oblige the on-lender to provide finance.
Approval of finance is subject to Savvi Credit Union’s credit criteria, policies and procedures.
The Ukraine Credit Guarantee Scheme will operate until 31 December 2024 or until the scheme has been fully subscribed.
Who can apply
Viable SMEs including primary producers, 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 an annual turnover not exceeding €50 million and/or an annual balance sheet total not exceeding €43 million
Eligibility Criteria
Borrowers must self-declare that:
- Their costs have increased by a minimum of 10% on their 2020 cost figures due to the impact of the conflict in Ukraine
- Finance is being sought specifically as a result of difficulties being experienced due to the conflict in Ukraine and meet the specific criteria as set out in the Loan Purposes section
- Finance is being sought for a new loan. Refinancing of existing loans is not permitted
Loan Purposes
Finance must be used for one or both of the following purposes:
- Working capital (including liquidity needs)
- Investment
As part of the SBCI application process, borrowers must sign a declaration (which may be subject to audit) that they meet the eligibility criteria and the applicable state aid rules.
Loan amount criteria
The amount of credit that can be obtained by borrowers under the scheme (whether under one or more finance agreements) is subject to the scheme rules and the Temporary Crisis Framework.
The maximum amount of credit per borrower under the scheme cannot exceed €1 million, and will in most circumstances be determined by one of the following two criteria:
- 15% of the borrower’s average total annual turnover over the last three accounting periods; OR
- 50% of the borrower’s energy costs over the 12 months preceding the month when the application for credit is submitted.
In limited cases applicants may be able to borrow to fund their anticipated liquidity needs for 12 months.
Finance providers may require borrowers to provide them with certain evidence before deciding whether, and under what conditions, they might grant them a loan. These requirements vary but are likely to include Management/Audited accounts/Business Plan.
Scheme costs
The interest rate applicable to the loan will be determined by Savvi Credit Union.
In addition, Savvi Credit Union will collect a premium which is payable to the Government of Ireland. The risk premium rate that will apply will depend on the size of the business and the length of time for which the credit is being advanced, as per the tables below:
SMEs
| Terms of loan (years) | Rate (%) |
|---|---|
| 1-3 years | 0.29 |
| 4-6 years | 0.68 |
Excluded Activities
- Finance of pure real estate development activity
- Finance of activities constituting pure financial transactions (e.g., purchase of shares)
- Loans to undertakings in difficulty
- Finance of activities forbidden by national or EU law
- Finance of the acquisition of road freight transport vehicles by undertakings performing road freight transport for hire or reward;
- Finance of export-specific activities, namely funding directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current expenditure
- linked to the export activity, or finance contingent upon the use of domestic over imported products. In particular, it should not apply to financing the establishment and operation of a
- distribution network in other States, or current expenditure linked to the export activity; and
Purchase of agri land.
Eligible NACE codes
NACE is the standard system used in the European Union for classifying business activity.
See the NACE codes eligible under this scheme here.
Credit decisions
Savvi Credit Union is ultimately responsible for the credit decision.
State Aid
The Ukraine Credit Guarantee Scheme currently operates under the EU “Temporary Crisis Framework” (TCF) for State aid measures to support the economy following the outbreak of the conflict in Ukraine.
- What do I have to do to apply for the Ukraine Credit Guarantee Scheme?
There is a two-step process to apply for a loan under the Ukraine Credit Guarantee Scheme:
STEP 1 – First register on the SBCI Hub and complete the online Eligibility Application Form. Once completed, eligible applicants will get an eligibility code. Please note, the SBCI eligibility code is not a guarantee of loan approval.
STEP 2 – Once you get the SBCI eligibility code, you should engage with Savvi Credit Union to begin the loan application process. It is only at this stage that a decision will be made on credit approval by Savvi Credit Union. - How much can I borrow under the Ukraine Credit Guarantee Scheme?
Loans range from €10,000 up to a maximum of €1 million (but are subject to further limitations on borrowing under the Ukraine Credit Guarantee Scheme rules). - How long does the SBCI eligibility code remain valid for?
The SBCI eligibility code is valid for six months from the date of issue, but it is always subject to the scheme remaining open and having funding available. - Can I use the same SBCI eligibility code more than once?
The SBCI eligibility code you get for your first loan can only be used once.
For second and subsequent loans you must complete a new eligibility application form and get a new SBCI eligibility code.
Once you have drawn down a loan, the declarations provided within the eligibility application form will need to be updated for the second and subsequent loans.
The second eligibility code can be used multiple times, provided that you don’t exceed the maximum loan amount available under the Scheme and the eligibility code hasn’t expired. - What is the loan period under the Ukraine Credit Guarantee Scheme?
Loans can be for terms of up to six years in duration (provided that the terms of any loan require it to be repaid in full by no later than 31 December 2030). - What can I use Ukraine Credit Guarantee Scheme loans for?
Under the Ukraine Credit Guarantee Scheme loans can only be used for working capital and/or investment purposes. - Can I get a loan to refinance existing loans/debt products?
No. The Ukraine Credit Guarantee Scheme does not allow for the refinancing of existing loans / debt products. - Can I get a loan to purchase agri land?
No. The Ukraine Credit Guarantee Scheme does not allow for the purchase of agri land. - How is the loan amount determined?
The maximum amount of the loan (which in any event cannot exceed €1 million) will in most circumstances be determined by one of the following two criteria:
a) 15% of the borrower’s average total annual turnover over the last three accounting periods;
or
b) 50% of the borrower’s energy costs over the 12 months preceding the month when the application for credit is submitted. - Will I need to provide security for a loan?
Loans up to €250,000 must be made on an unsecured basis (unless it is a requirement of the product feature e.g., asset finance, invoice discount facilities).
Loans greater than €250,000 may require additional security, this remains at the discretion of the finance provider. - If I have more than one loan of €250,000 are both unsecured?
If the loans are with two different on-lenders, they will both be on an unsecured basis.
If they are with the same on-lender, then security may be required for the amount in excess of €250,000. - What is the risk premium being charged on these loans?
The risk premium rate that will apply will depend on the size of the business and the length of time for which the credit is being advanced, as per the tables below:
SMEsTerms of Loan (Years) Rate (%) 1-3 years 0.29 4-6 years 0.68 Small Mid-Caps
Terms of Loan (Years) Rate (%) 1-3 years 0.73 4-6 years 1.55 - Why is there a risk premium charged on top of the interest rate?
This risk premium represents the cost to the Government in providing the 80% guarantee scheme to the participating on-lenders. - How long will it take Savvi Credit Union to assess my credit application?
Approval depends on the loan amount involved and if Savvi has all the information needed to process an application. - Can I get more than one loan?
Yes. You can get more than one loan, provided that the total of those loans does not exceed the maximum loan amount available to you under the Scheme. - Can I apply for multiple loans under the Ukraine Credit Guarantee Scheme?
The maximum amount of the loan (which in any event cannot exceed €1 million) will in most circumstances be determined by one of the following two criteria:a) 15% of the borrower’s average total annual turnover over the last three accounting periods;orb) 50% of the borrower’s energy costs over the 12 months preceding the month when the application for credit is submitted. - Is there a closing date for the Ukraine Credit Guarantee Scheme?
Loans will be available up to 31 December 2024, or until the scheme has been fully subscribed. - What State aid regime is applicable to the scheme?
The provision of funding for the Ukraine Credit Guarantee Scheme is initially being made under the EU Commission Temporary Crisis Framework and may in certain circumstances be made available under separate State aid rules. - How do I know what previous State aid I have received?
Where you have received State aid, you will have received a letter from the State body that provided it. Examples of State aid granting bodies include Enterprise Ireland, Bord Bia or the Local Enterprise Office. - What is a NACE code?
NACE stands for the “Statistical Classification of Economic Activities in the European Community”. It is the standard system used in the European Union for classifying business activity. NACE codes are divided into sectors such as retail, manufacturing, services etc.
The list of NACE Codes eligible for the Ukraine Credit Guarantee Scheme is available on the SBCI website. - What does “registered and operating in Ireland” mean?
It means that the applicant operates their business and has registered business address in Ireland. - What does “primary producer” mean?
A primary producer is a person engaged in the production, rearing or growing of primary products including harvesting, milking and farmed animal production. It also includes fishing and the harvesting of wild products. - What if the on-lender does not give me the amount/term of loan I applied for?
Approval of a loan under the scheme is subject to the individual on-lender’s credit policy. The maximum loan amount may not be appropriate in every case.
If you are not satisfied with the reason given, you can undergo the on-lenders’ appeal process.