Credit screening ensures SMEs and viable farms have access to bank credit

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Catherine CollinsHead of Credit Review, explains the agency’s function and how it assists borrowers.

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Most Irish businesses have survived the pandemic, but are facing other challenges in the form of significant increases in energy costs, labor shortages and supply chain issues. To stay competitive, they may need to fund improvements to their business. Bank financing as well as government aid will be part of the solution for many companies.

Although the majority of businesses are successful, some businesses may struggle to get credit, especially if the business has struggled in the past two years. Additionally, with the exit of two banks from the Irish market, businesses may even need to visit a new bank to apply for credit. Credit review can help businesses overcome difficulties when they are having difficulty obtaining credit.

What we do

The Credit Screen was put in place by the Minister of Finance to ensure that 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 application is denied by a bank. The call applies to new credit applications, existing facilities that have been reduced or withdrawn, or applications to restructure a credit facility. We can consider applications for credit facilities such as overdrafts, term loans, invoices or asset financing up to a value of 3 million euros. Participating banks include AIB, Bank of Ireland, PTSB and Ulster Bank.

Restructuring proposals may be appealed whether the restructuring was requested by the borrower or the bank. Restructuring is increasingly important after Covid as companies adapt to changing economic conditions and seek to resolve legacy debt and creditor issues.

The process, which is simple and affordable, is available to all Irish SMEs and agricultural businesses. Above all, in more than 80% of the cases we support, companies are granted a loan or credit solution by their bank.

So what happens when a business or farm applies for a credit report?

When a company requests an opinion, a reviewer from the Credit review The team is responsible for assessing whether the business is viable and will have sufficient cash in the future to repay the loan or meet restructuring obligations. The review team comprises a panel of professional credit experts across Ireland, with frontline experience in SME and agricultural finance. They are credit experts who are familiar with the banking industry and how it works, and they also understand what it takes to run a successful business.

Once the examiner has reviewed the relevant documentation on file with the bank, he/she will contact the borrower to discuss in detail and better understand the business by reviewing its background, existing debts, future potential, management and its markets, as well as the reason for the new request for credit or restructuring. The bank is also asked to provide details on how it views the business, and specifically why it refused to lend. Once the file has been studied, we formulate our Opinion on the bank’s credit decision, which is sent to the bank and the borrower.

Catherine CollinsHead of Credit Review, explains the agency’s function and how it assists borrowers.

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 requested credit facility, we will offer a roadmap to make future bank applications more likely to be successful, and refer SMEs to other government assistance that may help them grow and develop their businesses.

What to do next

We encourage all professional borrowers who feel they are having difficulty accessing credit to contact Credit Review. In addition to our appeals process, Credit Review operates a helpline providing helpful information and telephone assistance to SMEs and farmers. Sometimes credit issues can be resolved without the need for a formal appeal. The Credit Review website also offers a number of accessible and easy-to-understand briefs on banking and credit issues that can help businesses successfully access credit.

For more information about our independent appeals process and information services, visit creditreview.ie or call the helpline on 0818 211 789 or 087-121 7244.

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