Lending to Small and Medium Enterprises

Introduction

Small businesses are key contributors to the Irish economy and are crucial for its growth and employment. At Bank of Ireland we are committed to supporting small and medium sized enterprises as they set up, establish and mature. Throughout the many stages in the life of your business there will be opportunities and challenges which may have financial implications for your business. Our ambition is to work with businesses in partnership, providing advice, being accessible, making it easy to do business with us, and responding promptly to your requests.

We endeavour at all times to be clear and transparent in all our customer engagements and to comply with our obligations under the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-sized Enterprises) Regulations 2015 (“the “SME Regulations”).

Background to SME Regulations

New SME Regulations came into effect on 1st July 2016. The SME Regulations set out the standards you should expect from Bank of Ireland, covering key aspects of the relationship between Banks and SMEs from credit applications and communications, to dealing with financial difficulties when problems occur.

The SME Regulations apply to all SME lending by regulated entities within the State. If you would like a copy of the SME Regulations, the document is available to download from the Central Bank website at www.centralbank.ie

SMEs are defined as businesses that employ fewer than 250 people and have an annual turnover not exceeding €50 million and/or an annual balance sheet total not exceeding €43 million.

Our Information Booklet on Lending to Small and Medium Enterprises (“Information Booklet”) aims to provide you with an understanding of the key provisions of the SME Regulations and sets out the framework within which we provide credit facilities to customers and assist businesses which are either in, or facing financial difficulties. A printed copy is available on request through your Relationship Manager or from any of our branches.

• Applying for a Loan
  We have a range of channels through which you can engage with us: your local branch, online, phone, or through your relationship manager. We will be happy to discuss or arrange a meeting in respect of any proposed application for credit and guide you through the process or they will refer you to the relevant experts within the Bank.

  Before applying for finance, it may be helpful to review the range of resources that we have available for businesses on our website. You can access a range of tools, templates, guides and checklists for use in your business, including a guide to obtaining credit, a Business Plan Template, Cashflow Forecast Tool and information on Government support schemes available through Bank of Ireland in the Business Banking section of our website at www.bankofireland.com.

  In addition, the ‘ThinkBusiness’ website is a rich source of relevant material, including case studies, guides to State support available, articles on taxation, IT, HR and Business and Financial Planning. This site can be accessed directly from our website or at www.thinkbusiness.ie.

  It is always a good idea to consult with your financial advisor/accountant to seek assistance and/or review any proposal in advance of meeting with us. You may of course bring your financial advisor to the meeting if you wish.
  

• Assessment
  As with all requests for credit facilities, we are required to gather certain information from you to assess your request and we will confirm to you the specific information we require to enable us to comprehensively assess the proposal. On receipt of all the information requested we will acknowledge receipt of your credit application within 5 working days, advising you that we are now in a position to progress your application to the credit assessment stage. We are committed to reverting to you with a decision on your application within 15 working days (unless otherwise advised) of receipt of all the information required to assess the proposal.

  Bank of Ireland has policies and procedures in place to ensure the fairest outcome to your application and undertakes to assess the application on its own merits, ensuring the information requested is relevant and not excessive and that the security requirements will not be unreasonable.

  When we have completed our assessment we will provide confirmation of the outcome to you in writing.

  In the normal course of our banking relationship we are available to meet with you at your request. We are also happy to offer you the option of a comprehensive annual review of all your credit facilities and related security. Just contact your Relationship Manager or Branch to arrange a meeting.
  

• Appealing a Decision
  Our Business Credit Appeals process enables you to appeal a Bank of Ireland decision in the circumstances outlined in our Information Booklet below.
  

  Information Booklet on the SME regulations for Business Lending to Small & Medium EnterprisesViewPrint
• Financial Difficulties
  We are committed to assisting you in the event that you find yourself experiencing financial difficulties. We recognize that not all circumstances are the same and we will seek to find the best solution in partnership with you. To assist us in providing this support it is critical that you fully engage with Bank of Ireland so that we can jointly discuss and address the situation. The earlier that contact is established, the quicker a potential solution can be discussed and agreed.

  Our Information Booklet available below outlines our approach to dealing with SMEs in financial difficulties and gives information on the support which we will provide to customers in this situation.
  

  Information Booklet on the SME regulations for Business Lending to Small & Medium EnterprisesViewPrint
• Other Supports

  Together with the various supports provided by Bank of Ireland the following websites are helpful in providing support and advice to SMEs:

  • www.bpfi.ie 
  • www.thinkbusiness.ie 
  • www.enterprise.gov.ie
  • www.localenterprise.ie
  • www.enterprise-ireland.com/en/ 
  • www.sfa.ie
  • www.isme.ie 
  • www.centralbank.ie 
  • www.creditreview.ie 

  Bank of Ireland is not responsible for information on third party websites.

• Government Support Schemes Available Through Bank of Ireland
  1. Government Credit Guarantee Scheme (CGS) – The Credit Guarantee Scheme is a Government initiative that was set up to encourage additional lending to commercially viable SMEs which, under normal lending criteria, are unable to obtain new or additional facilities from their bank. The scheme facilitates this by providing a Government-backed guarantee for 80% of the facility value.Key features of the scheme:
     • Facilities of €10,000 up to €1m
     • Terms of up to 7 years
     • Term Loans, Demand Loans and Performance Bonds

     To be eligible for the scheme, the borrower must:

     • Be involved in a commercial activity i.e. any activity carried out with the objective & intention of making a profit
     • Be a sole trader, partnership, franchise, co-operative or limited company either trading or prepared to start trading in the near future
     • In the Bank’s opinion have a viable business proposal
     • Be able to repay the facility

     Further information on State Aid, Charges and Exclusions can be found here:
     www.djei.ie

  2. Strategic Banking Corporation of Ireland (SBCI) – The SBCI aims to deliver lower cost, long-term, innovative and accessible funding to independent Irish SMEs once the SME meets each of the following criteria:
     • The enterprise employs fewer than 250 employees
     • The enterprise has a significant presence in Ireland
     • The enterprise has an annual turnover not exceeding €50m and/or an annual balance sheet total not exceeding €43m
     • The enterprise is an independent entity
     • Less than 25% of capital / voting rights are held by public bodies

     The SBCI scheme operates under De Minimis State Aid Rules.More information can be found here:
     www.sbci.gov.ie

  3. Credit Review Office (CRO) – The Credit Review Office provides an independent review process for SMEs, sole traders and farm enterprises that have had requests for credit refused or had existing credit facilities reduced or withdrawn. The CRO’s mandate includes (but is not limited to) term loans or overdrafts, finance and leasing and invoice discounting.Bank of Ireland customers can apply to the CRO for a credit review if:
     • The business is an SME, including sole trader or small to medium-sized farm
     • The application was for credit facilities from €1,000 up to €3m
     • The credit facility application was refused or an existing facility reduced and the borrower has exhausted the Bank’s internal appeals process

     The Credit Review Office has no regulatory or statutory powers to override the Bank’s lending decisions which are a matter for the internal policy & governance of the Bank. An outcome of the review process will be an independent & impartial opinion on the credit decision. In the event the CRO’s opinion is that the lending could have been done within acceptable risk boundaries, the Bank will be required to comply with the recommendation or explain to the CRO why they will not do so. More information can be found here:
     www.creditreview.ie

  4. Microfinance Ireland (MFI) – Microfinance Ireland was established to deliver the Government’s Microenterprise Loan Fund, offering unsecured loans from €2,000 up to €25,000 over terms of 3 to 5 years. Businesses from all sectors are eligible to apply under certain conditions:
     • Eligible companies may be Sole Traders, Partnerships or Limited Companies with fewer than 10 employees and an annual turnover of less than €2 million
     • Loans may be used to fund the start-up of a business, the purchase of stock, equipment etc. and are also available to established enterprises

     Where appropriate and with the consent of the borrower, the Bank will refer suitable cases to MFI for funding support. More information can be found here:
     www.microfinanceireland.ie