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SME Regulations improve protection for SMEs

New SME Regulations governing lending to SMEs and their guarantors, from regulated lenders came into force on 1st July, 2016 and from credit unions on 1st January, 2017.

The aim of the new SME Regulations introduced by the Central Bank is to give greater protection to SMEs when borrowing from regulated lenders and credit unions while facilitating improved access to funding/credit.

There are a number of specific requirements introduced, some of which include:-

  • Greater protection for guarantors of SME loans;
  • Ensuring SME borrowers receive greater transparency around the credit application process;
  • If declining SME borrowers the credit they have applied for, the lender must now giver its reasons for refusal in writing with those reasons being specific to the actual application submitted;
  • Expanding the grounds for appeal.
  • Offering SME borrowers the option of a meeting with their lender which includes a credit review, at least once a year.

To come within the SME Regulations, the borrowing SME must employ fewer than 50 persons and have either or both of the following:-

  1. a) an annual turnover which does not exceed €10 million;
  2. b) an annual balance sheet total which does not exceed €10 million

The Central Bank has published a useful guide to these SME Regulations.  We have attached the link to the guide here.

At Douglas Law Solicitors, we want to see your business thrive and grow.  We are here to help you with all of the legal issues that arise for your business.  Please don’t hesitate to contact us on 021 489 7654 or by email on should you have any queries on this or any other issue.