The borrower contributes to the cost of the Scheme by paying a guarantee premium on loans advanced. This premium is payable in addition to loan repayments. It represents the cost to the government of providing the 80% guarantee to participating lenders.
The premium will be collected in line with the repayment terms of the loan and is payable to the credit union who will in turn pass it on to the Department of Enterprise, Trade and Employment.
The 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.
Please see below an overview of the rates which will be applicable to SMEs.
Duration of Facility |
1 year |
2 year |
3 year |
4 year |
5 year |
5.5 years |
Rate % |
0.15 |
0.26 |
0.29 |
0.50 |
0.61 |
0.68 |
Example of Premium payable – a loan of €20,000 over 36 months will have a Premium of 0.29% applied. The cost of this Premium over the life of the loan will be €86.63.