Businesses face paying insurance fees of up to 1.55 per cent a year to the State for loans on offer through the Government’s €2 billion Covid-19 credit guarantee scheme, which opened to applications on Monday.
The State’s main banks have set maximum interest rates for small business loans on offer through the new scheme at as low as 2.48 per cent, less than half the average cost of a typical SME loan.
The guarantee plan, first flagged in early May, will run until the end of the year.
The scheme, which provides a State guarantee for 80 per cent of borrowings advanced to firms under its auspices, is aimed at companies that have lost 15 per cent of actual or projected turnover.
Loans of €10,000-€1 million are available under the scheme, which initially will be made through Bank of Ireland, AIB and Ulster Bank. Officials are working to bring lending