In accordance with the Central Bank’s SME Regulations, the Central Bank’s clear expectation is that lenders engage with you to deliver appropriate solutions and facilitate as many borrowers as possible to return to repaying their debt.
Your lender may offer you an alternative arrangement to ease the financial burden on your business, or may provide new credit to your business to help it trade through these difficult times.
An alternative arrangement is a new agreement with your lender to address arrears or financial difficulties, and may include:
- A reduced payment for a period of time, which could be less than or greater than interest only
- An “interest only” arrangement, where you only pay the interest payments on your loan for a period of time
- A temporary increase to your working capital facilities where it is agreed with your lender, for example, to address temporary liquidity issues
- A payment break where you agree with your lender to postpone your repayments, or agree a reduced payment where your loan repayments are reduced for an agreed period of time.
Every borrower’s circumstances are different, and as such, your lender will consider your particular situation and discuss a range of options to help you deal with your financial difficulties.
Whilst all decisions on credit applications are a matter for each lender, and the Central Bank has no role to play in the commercial decisions of those banks or lenders, the Central Bank supports the supply of credit to viable businesses.
If your lender does not offer an alternative arrangement, it must inform you in writing of the specific reasons why it is not offering an alternative arrangement.
Your lender must also advise of your right to appeal its decision and explain the process for doing this. Your lender must make a decision on your appeal within 15 days, or if it can’t do so, it must advise when it will decide, and explain why it will take longer than 15 days.
If you are not satisfied with the decision of the bank or lender on your credit application, you may have the right to appeal that decision to the Credit Review Office. The lender must advise you of this right to appeal, and provide you with the contact details of the Credit Review Office.