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Catherine Collins (pictured), Deputy Head of Credit Review, explains the role of the organisation and why borrowers need to be aware of its services in the months ahead

Could you explain the role of Credit Review and why it was established?

Credit Review was set up by the Minister for Finance in 2010, and has a simple mission - to assist business borrowers (SMEs and Farms) which are viable or potentially viable to access bank finance for recovery and growth.

Credit Review operates like an ombudsman, reviewing credit/loan refusals by the banks and providing an independent appeals process. Businesses that have been refused credit or had existing facilities such as overdrafts reduced or withdrawn can apply for an independent review of their credit application. So we can review both new applications for credit, as well as restructuring and refinancing proposals.

How can Credit Review help businesses affected by Covid-19?

Many businesses have survived the initial Covid-19 crisis, helped by government supports such as the Temporary Wage Support Scheme, grants, low-cost loans and deferred taxes, to keep going or resume activity quickly when the crisis eases.

Banks have offered payment breaks to their business customers to enable a breathing space while the business owners adapt to the new environment post-Covid-19. All of these initiatives have greatly helped many businesses survive the initial lockdown period. But when these supports end, businesses will need ongoing funding to continue to operate. And that usually means getting bank credit facilities, which is where Credit Review can help.

For most small businesses, the main source of funding outside of their own cash reserves is bank finance — typically, overdrafts, stocking and term loans or debtor finance. Some enterprises will require short-term working capital, while others will require funding for longer-term capital expenditure to pivot or adapt their business model, and to focus on new products or markets.

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Other businesses may need to restructure existing debt, as they will be unable to meet some of their debt obligations in the short term due to the drop in demand. This category of business requiring debt restructuring is expected to become increasingly important when the current payment breaks for business loans finish, from October onwards.

Borrowers and banks will need to work together to ensure successful outcomes to requests for forbearance, restructuring or new lines of credit. Where they are unable to reach agreement, Credit Review can provide a way forward.

What is involved in a review by Credit Review?

When an application is received from a disappointed borrower, a Credit Reviewer is assigned, who contacts them to discuss their case and better understand their business. Credit Reviewers are credit expert professionals, with frontline SME and farming finance experience.

After receiving information from the borrower about its market, management, debt and finances, and also from the bank, the Reviewer forms an Opinion as to whether the business is viable and will make enough cash to pay back the loan or meet restructuring obligations.

Even if the Reviewer can’t recommend the particular facility requested, they will suggest a roadmap to make future bank applications more likely to succeed. In some cases, bank funding may not be the solution – in which case the Reviewer will highlight alternative supports that may help the borrower and the business.

Who can apply?

The service is for Small and Medium Enterprises, including sole traders and farm enterprises that have had new requests for credit refused, or existing credit facilities reduced or withdrawn. SMEs are businesses with less than 250 employees, and which have an annual turnover of less than €50m and/or a balance sheet total not exceeding €43m. Banks participating in the review process are AIB, Bank of Ireland, PTSB and Ulster Bank.

The review process covers all applications for new loans or restructured credit facilities from €1,000 up to €3,000,000. There is a small fee payable of between €100 and €250.

Visit CreditReview.ie to find out more and request a call-back, or call the helpline on 1850 211 789 and talk to one of our professional reviewers so that you are fully informed on the credit issues relevant to your situation.

Pictured: Catherine Collins, Deputy Head of Credit Review