How the Ukraine Credit Guarantee Scheme is Helping Irish SMEs Access Finance

How the Ukraine Credit Guarantee Scheme is Helping Irish SMEs Access Finance

Let’s face it, running a small business in Ireland these days isn’t easy, especially with rising costs and supply chain issues thanks to the Ukraine conflict. But there’s good news for Irish SMEs: the Ukraine Credit Guarantee Scheme (UCGS) is here to help. It’s a government-backed initiative that offers low-cost business loans to help businesses keep moving forward, whether you need working capital or investment in new machinery.

What’s the Ukraine Credit Guarantee Scheme All About?

The UCGS is designed to help businesses hit hard by rising input costs—like energy—and other disruptions caused by the Ukraine conflict. If your company has fewer than 250 employees and an annual turnover of less than EUR 50 million, this could be an excellent option for you. It’s open to businesses in a range of sectors, from retail and construction to agriculture and manufacturing, giving many Irish SMEs access to affordable finance.

Key Sectors and Regions Getting Support

So far, over €329 million in loans have been issued to Irish businesses under the UCGS. Some of the industries benefiting the most include:

- Wholesale and Retail Trade: 16% of loans approved, representing 19% of the total loan value (€73.46 million).

- Construction: 14% of loans approved, accounting for 17% of the total loan value (€64.60 million).

- Agriculture, Forestry, and Fishing: 25% of loans approved, with 14% of the total loan value (€52.47 million).

- Manufacturing: 9% of loans, making up 13% of the total loan value (€47.46 million).

In terms of location, Dublin, Cork, and Galway are the big winners, but businesses across all of Ireland are being supported:

- Dublin: €85.46 million (26% of the total loan value).

- Cork: €36.48 million (11% of the total loan value).

- Galway: €19.30 million (6% of the total loan value).

- South East Region: €52.88 million (16% of the total loan value).

- Midland: €23.14 million (7% of the total loan value).

Whether you’re running a business in bustling Dublin or the quieter corners of Ireland, there’s a good chance this scheme can help you.

One of the best things about the UCGS is that 99% of the loans are unsecured. That means you don’t have to offer up your house, car, or other valuable assets as collateral, making it much easier for smaller businesses to access the funds they need. Plus, interest rates are pretty reasonable, sitting between 4% and 6% with the pillar banks and then increasing as you look beyond the alternative funders like Linked Finance. Not bad for a government-backed loan!

If you need funds to grow your business, buy new equipment, or keep things ticking along, this scheme offers great flexibility.

How Are Businesses Using These Loans?

Here’s the breakdown of how businesses are spending their UCGS loans:

- 44% of loans are going towards business expansion: Think hiring more staff, entering new markets, or opening another location.

- 40% of loans are spent on machinery and equipment, Helping businesses keep their operations running smoothly with the right tools.

- 12% of loans are used for working capital: Keeping cash flow healthy to cover day-to-day expenses.

What Should Accountants Know?

The UCGS is an excellent option for accountants and financial directors to recommend to clients struggling with rising costs or supply chain disruptions. The fact that most loans are unsecured means there’s less risk involved, and the competitive interest rates make it a no-brainer for businesses looking for affordable finance in Ireland. Whether helping a local shop in Galway or a farm in Cork, this scheme can give businesses the breathing room they need to grow or stabilize.

How Simplí Finance Can Help

At Simplí Finance, we help you navigate the Ukraine Credit Guarantee Scheme and other business finance options. We’ll work with you to determine your eligibility, walk you through the application process, and ensure you’re getting the best possible loan terms for your business.

If you’re an Irish SME owner, an accountant, or a financial director looking to help your clients access affordable business loans, Simplí Finance is ready to assist. Contact us today to learn how we can help your business grow and thrive.