Wednesday 25 April 2018

Watchdog to simplify loan review process for SMEs

Businesses offered new application form after criticism of old system

Peter Flanagan

THE Government's adjudicator on lending to small and medium enterprises (SMEs) has revam-ped its applications process in an effort to make it easier for SMEs to use the service.

The Credit Review Office (CRO), which reviews applications for loans and overdrafts from SMEs that have been turned down by AIB and Bank of Ireland, has cut the process down to one step, with the applicant now only having to fill in a form and then leave the CRO to do the rest.

The CRO has been criticised in the past for being too time consuming and difficult for struggling companies who need to spend as much time as they can looking after their business rather than dealing with administrative issues.

CRO boss John Trethowan said he hoped the new method would encourage more SMEs to use his office.

"We have made a number of changes to make the process less 'clunky' for businesses. When we first started the office last year, if an SME wanted to use our facility we would speak to them to get their 'facts and opinions', then go to the bank and get their 'facts and opinions', then go back to the SME to get the formal application.

"That all took time but now we have cut that process back. The company will now have to submit one four-page document and then we will take it from there," he said.

New powers

Press reports have suggested that the CRO will be given sweeping new powers by the Government, but Mr Trethowan said this will not be the case.

"Like everyone else, I expect a loan guarantee scheme (LGS) to be announced with the upcoming 'jobs budget' but as far as I'm aware the CRO will not be involved in initially deciding on who should or should not be covered by the guarantee.

"My understanding is that the CRO may be used as an adjudicator if a business is refused access to the LGS. We will not be deciding straight off the bat who is and isn't covered by it. Our role will be very similar to what we do for credit applications."

The CRO produces its latest quarterly report next month. The report will include a full account of the office's progress, and that of the banks', one year into its existence.

"The number of applications is in line with previous quarters but we hope the simpler process will encourage firms to use our services," Mr Trethowan added.

Irish Independent

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