Specialist business lender Capitalflow has been allocated an initial €31m in Credit Guarantee Scheme funding for SMEs that have been impacted by Covid-19.

It is the largest allocation amongst non-bank lenders to date and is available from now until the end of June.

The Credit Guarantee Scheme was brought in by the Government to provide low cost loans to businesses from €10,000 to €1m. 

The risk of the loan is borne 80% by the State and 20% by the financial institution.

Funds are subject to the following rules:

  • The guarantee scheme is aimed at helping businesses that have experienced an adverse impact of a minimum of 15% in actual or projected turnover or profit due to Covid-19, with funding amounts of €10,000 - €1,000,000.
  • Total facilities may not exceed €1m. Eligible funding under the scheme includes Equipment and Machinery Hire Purchase, Leasing and Refinance.
  • The amount businesses can borrow is based on 25% of their total 2019 business turnover or double their annual wage bill.

The CEO of Capitalflow, Ronan Horgan, said the lender has received enquiries from the hospitality sector in particular.

"We have seen the tourist, the leisure industry, coach operators, hotels, pubs and restaurants, enquiring. We know they are the worst affected," Ronan Horgan said. 

"Having said that, we are seeing a lot of enquiries from customers on the commercial property lending side, transport and distribution, construction, medical, even your local retail food stores are still quite active in the market place," he said.

Capitalflow is also announcing new SME lending totalling €250m for 2021.

Mr Horgan said that while some businesses will be cautious about borrowing at this time, "there is an underlying demand for credit which is set to increase in the second half of the year, when we expect business customers will have more confidence as the vaccine roll out continues".