Credit Review ensures viable SMEs and Farms have access to Bank Credit
Catherine Collins, Head of Credit Review, explains the function of the organisation and how it assists borrowers
Getting Help from Credit Review
Most Irish businesses have survived the pandemic but are facing further challenges in the form of large increases in energy costs, labour shortages and supply chain issues.
To stay competitive, they may need to fund improvements to their business. Bank funding together with government supports will form part of the solution for many firms.
While the majority of businesses will be successful, some businesses may find it difficult to get credit – especially if the business has struggled in the past two years. In addition, with two banks exiting the Irish market, businesses may even need to go to a new bank to apply for credit. Credit
Review can help businesses overcome challenges when experiencing difficulty securing credit.
What we do
Credit Review was set up by the Minister for Finance to ensure viable (or potentially viable) businesses have access to credit from Irish banks. Our appeals process allows businesses to have an independent review when a credit request is declined by a bank. The appeal applies to new credit applications, existing facilities that have been reduced or withdrawn, or requests to restructure a credit facility. We can review requests for credit facilities such as overdrafts, term loans, invoice or asset finance up to a value of €3million. Participating banks include AIB, Bank of Ireland, PTSB and Ulster Bank.
Restructuring proposals may be appealed, whether the restructuring has been sought by the borrower or the bank. Restructuring is increasingly important post Covid, as businesses adapt to changing economic conditions and seek to address legacy debt and creditor issues.
The process, which is simple and affordable, is available for all Irish SME and farm businesses. Most importantly, in over 80% of the cases we support, the businesses are approved a lending or credit solution by their bank.
So, what happens when a business or farm applies to Credit Review?
When a business applies for a review, a Reviewer from the Credit Review team is assigned to assess whether the business is viable and will, in the future, have sufficient cash to pay back the loan or meet restructuring obligations. The review team includes a panel of expert credit professionals across Ireland, with frontline SME and farming finance experience. They are credit experts who are familiar with the banking sector and how it works, and they also understand what it takes to run a successful business.
Once the Reviewer has examined the relevant documentation on record with the bank, he/she will contact the borrower to discuss in detail and better understand the business by looking at its track record, existing debts, future potential, management and markets, as well as the reason for the new credit application or restructuring request. The bank is also asked to provide details on how it views the business, and specifically why it has refused to lend. Once the case is reviewed, we form our opinion on the bank’s credit decision, which is sent to the bank and the borrower.
In most cases that come to Credit Review, we can support the borrower by recommending a credit solution that works for both the business and the bank. However, where the Reviewer is unable to recommend the credit facility requested, we will suggest a roadmap to make future bank applications more likely to succeed, and we will signpost SMEs towards other government supports that can help them to grow and develop their businesses.
What to do next
We encourage all business borrowers who feel they are having difficulty accessing credit to contact Credit Review. In addition to our appeals process, Credit Review operates a helpline service providing useful information and assistance over the phone to SMEs and farmers. Sometimes credit issues can be resolved without needing a formal appeal. The Credit Review website also has a number of accessible, easy-to-understand, information notes on banking and credit issues that can help businesses successfully access credit.
For more information on our independent appeals process and information services, visit creditreview.ie or call the helpline on 0818 211 789 or 087-121 7244.