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The Credit Review Office's mission is to assist SMEs and farms that are viable or potentially viable to secure access to the bank finance they need to grow and develop. Credit Review Office chief John Trethowan (pictured) explains how

The Credit Review Office was set up in 2010 after the financial crisis and provides an independent appeals service for business borrowers who have had their credit facilities refused, reduced or withdrawn by an Irish bank.

It also monitors credit and banking conditions for small businesses and farms in the Irish market, reporting regularly to the Minister for Finance and highlighting issues and problems faced by Irish businesses seeking credit.

What is involved in a review by the Credit Review Office?

The Credit Review Office operates like an ombudsman, reviewing credit/loan facilities that have been refused, reduced or withdrawn by the banks. When an application is received from a disappointed borrower, a credit reviewer is assigned who will contact them to discuss and get an understanding of their business and their credit needs before carrying out the review.

The review will look at the track record of the business and its future potential, plans and projections, its management and markets, its existing debt, as well as the reason for the new credit application.

The reviewer will then form an opinion as to whether the business is viable and if it will make enough cash to pay back the loan. The reviewers always work to find a bankable solution for SMEs. Even if the reviewer can’t recommend the particular facility requested, he will suggest a road map to make future bank applications more likely to succeed.

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Who can apply?

The service is for SMEs, including sole traders and farm enterprises that have had new requests for credit refused, or existing credit facilities reduced or withdrawn. Banks participating in the review process are AIB, BOI, permanent tsb 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.

What percentage of appeals have been found in favour of borrowers?

The Credit Review Office reviewers uphold and support appeals of applicants in over 50% of cases.

How can borrowers improve their success rates at getting credit when they need it?

• Make sure you have made a formal application that has been considered by the bank’s credit department – and not just by the person you speak to in the branch or on the phone. Always check that you have made a formal application and not just an enquiry. Doing so means the credit department will review your request, which you can appeal if they refuse.
• Ensure you have provided all the information requested by the bank. The bank typically has 15 days to respond to an application, but the clock is switched off if the bank is awaiting additional information from you.
• Try to reduce perceived risk by providing clear, concise and relevant information about the business, with realistic projections showing ability to repay.
• Ensure that the bank is not the only risk taker and that you are putting your own stake into the business as well.
• While lending is all about future cashflow – as this is how you will repay the debt – risk can be reduced where there is strong collateral or security, as a fall-back position.

Finally, if you feel you have addressed all the bank’s concerns, that your credit application is viable/will be repaid, and you are still refused, remember that you can appeal the decision to the Credit Review Office.