If Payment Breaks are Over – What Happens Next for Irish SMEs?

In mid-September, according to the Central Bank 23.8% of all SME borrowers across all main Banks had availed of payment breaks during the Covid-19 crisis. Applications for payment breaks ceased at the end of September, and businesses will be expected to recommence repayments from October onwards, or negotiate individual loan restructure terms with their Banks.

So, what are the repayment options available to businesses now?

Many borrowers will be able to resume capital and interest repayments, however after a Covid19 payment break, they have 2 main options:

• Make higher monthly repayments and leave the term of their loan unchanged
• Make a similar monthly repayment but extend term of the loan

Some borrowers may not be able to return to full payment of their loan at present. They may need to avail of other solutions available from banks such as interest only for a period until the business revenues recover as Covid-19 restrictions ease, or they develop new markets or new ways to market.

The Central Bank and the government, together with the banks, have agreed that these solutions will be agreed on a case-by-case basis by the lender and the borrower. Credit Review supports the return to this normal process of engagement between Banks and individual SMEs and Farms.

What if I am not happy with the banks proposed new repayment structure, or the bank won’t agree to my requested repayment plan?

Credit Review can help. Set up by the Minister for Finance in 2010, it has a simple mission – to assist SMEs and Farms which are viable or potentially viable, to get access to the bank finance they need for their businesses.

Credit Review doesn’t just deal with new applications for credit, it also reviews changes to existing credit facilities – where credit facilities are being restructured, reduced or even withdrawn.

So if you seek to change the repayments on your existing debt – e.g. to extend the term of a business loan, or amalgamate short term debt with longer term, to deal with a fall in revenues in the short term – and you cannot agree terms with your Bank, you can appeal to Credit Review, which has a team of independent expert lenders who could help.

Or if your bank proposes a change – for example to reduce your overdraft limit – and you believe you need to keep the existing level, you can appeal to Credit Review, where we will take an independent view on what the business needs.

Credit Review accepts applications from businesses that have had credit facilities of up to €3 million refused, reduced or withdrawn by AIB, Bank of Ireland, PTSB and Ulster Bank.

Contact CreditReview.ie and talk to one of our professional reviewers so that you are fully informed on bank credit issues relevant to your business.

 Phone 087-1217244 or email info@creditreview.ie