Ensuring viable SMEs get access to bank credit

MAKING A SUCCESSFUL CREDIT APPLICATION POST COVID.

To improve your chances of making a successful credit application, you need to present your case well to your bank, so that they understand your business. The easiest way to do this is to have a simple business plan which includes trading records showing what your business trading was like pre-Covid and during Covid, and provides credible cash flow projections for your business going forward.

If your business changed substantially during Covid, your business plan should address these changes. In addition, you may have to unwind any special concessions made during the pandemic and demonstrate how your business can afford to do that – as well as meeting current commitments.

For example, if you negotiated rent concessions from your landlord that will have to be paid back as well as paying current rent due.

Similarly, if your business warehoused its tax debts, you will be required to enter into a Phased Payment Agreement (“PPA”) – effectively a three-to-five-year repayment plan at 3% interest. You should engage with Revenue early to ensure you get a deal that works for you and your business.

Repaying legacy debt that was required to weather the Covid period will impact your cashflow going forward, and your ability to repay the bank you are seeking finance from.  The bank will want you to show that you can make all repayments comfortably.

More detailed information is available in the information note ‘How to Apply for a Loan’ which can be found at www.creditreview.ie in the ‘Resources’ section.

If you are refused business credit by your bank, or have your existing facilities reduced or withdrawn, Credit Review can help you to appeal this decision. Set up by the Minister for Finance in 2010, Credit Review’s mission is to ensure viable SMEs and Farms access the bank finance they need for their businesses.

For more information on our independent appeals process visit our website at creditreview.ie contact us by email at info@creditreview.ie, by telephone on 0818 211 789, or follow us on our social media channels, LinkedIn and Twitter.