Government Body for BusinessCredit Review

Credit Review: Helping Viable Businesses Access Loans

Catherine Collins, Deputy Head of Credit Review, foresees an increase in the numbers of businesses requiring their intercession in 2021, and is confident the agency is nimble and prepared to manage.

Credit Review Office Portrait of Catherine Collins
Photo Karl Hussey / Fennell Photography Copyright 2018

 

Credit Review was set up in 2010, in the wake of the last financial crisis, to ensure potentially viable businesses and farm enterprises had access to credit to get them back on the path to recovery and growth. We provide an appeals process for businesses who have had credit facilities refused, reduced or withdrawn by a bank; AIB, BOI, PTSB and Ulster, up to a value of €3m. We can also review restructuring arrangements, whether sought by either the borrower or the bank,” explains Catherine Collins, Deputy Head of Credit Review. Credit Review appeals are successful in 90% of the cases it supports, resulting in businesses receiving a lending or credit solution from their bank. When a business applies for a review, a Credit Reviewer is assigned, to form an opinion as to whether the business is viable and will make enough cash to pay back the loan or meet restructuring obligations.

 

HELPING BUSINESS
Credit Review was set up in 2010 as a response to the global financial crisis. “Now we are dealing with a global health crisis, so our business model hasn’t changed significantly, we are still here to help businesses having difficulty getting credit.” On receiving the Recognition Award for Best Government Body for Business, Collins says, “It’s great to have the work of the team recognised in this way—from the office staff , dealing with the helpline and borrowers queries in a prompt and efficient way, to the team of credit reviewers who are continuously coming up with creative credit solutions for borrowers, which can enable them to access credit to grow and develop their businesses.”

Collins notes, “We are the only State body with direct experience of the interface between Banks and their small business customers. In addition to providing an appeals or review process, we also operate a helpline for callers having business credit issues. We report to the Department of Finance, highlighting general issues and developments in the bank credit market and the impact on businesses.”

 

THE YEAR AHEAD
Over the last year government business supports and bank payment breaks have helped keep many businesses going, but, says Collins, “This year will be an even more critical year as payment breaks finish and financial supports are scheduled to reduce. Businesses will need ongoing funding to continue to operate. For most small businesses, the main source of funding (outside of their own cash reserves) is bank finance—typically, overdrafts, stocking and term loans or debtor finance. Borrowers and banks will need to work together to ensure successful outcomes to requests for forbearance, restructuring or new lines of credit. And for those that are unsuccessful, Credit Review is ready to help.” “The major challenge we foresee in 2021 is the potential increase in the numbers of businesses that will need our services as a result of financial strains on businesses due to the pandemic closures and revenue declines—especially in sectors most hard hit like tourism and hospitality. Many of these businesses will need either new lines of credit or existing credit facilities restructured, until their businesses are able to open again and return to some form of normal trading. Fortunately our business model can adapt; we have a panel of expert credit reviewers around the country who are paid on a case-by-case basis, and can ramp up capacity when we need it.”

 

STAYING NIMBLE
“When Credit Review was set up in 2010 by the Minister for Finance, it was with the instruction not to create an empire, and to ensure that the review process would be conducted with as little formality as possible and as expeditiously as possible. The agency has stayed small and nimble, with a minimum of formality, and a strong client focus on being as responsive as possible to the needs of our users. Our helpline responds to calls promptly, and can often solve issues without the need for formal appeals. Our reviewers are happy to discuss cases with applicants at a time that suits them, often outside of traditional business hours.” Collins concludes outlining the varying needs of businesses for the coming year, and how Credit Review is prepared to assist with them: “Some enterprises will require short-term working capital, some will require funding for longer-term capital expenditure to pivot or adapt their business model, and to focus on new products or markets. Other businesses may need to restructure existing debt, as they will be unable to meet some of their debt obligations in the short term due to the drop in demand. This category of business requiring debt restructuring is expected to become increasingly important when the current payment breaks for business loans finish, from October onwards. Borrowers and banks will need to work together to ensure successful outcomes to requests for forbearance, restructuring or new lines of credit. Where they are unable to reach agreement, Credit Review can provide a way forward.”