banking only better
A guide for
Small and
Medium
Enterprises
(SMEs) in or
facing financial
difficulties
An information booklet brought to you by permanent tsb
Are you in arrears or is your
business facing financial difficulty?
Now more than ever businesses throughout Ireland are experiencing a much more
difficult trading environment.
In some cases this can mean cash flow difficulties and where the business has
loans or credit facilities, arrears can sometimes arise.
This booklet sets out details of permanent tsb’s framework for assisting business
customers who are currently having difficulties making their repayments or for
those customers who anticipate that they may have difficulties in the future.
This framework forms a part of our commitment under the Code of Conduct for
Business Lending to Small and Medium Enterprises as published by the Central
Bank of Ireland.
We’re here to help so talk to us
today
If you have a business account with permanent tsb and are in arrears, or worried
that you soon might be, talk to us before a small problem becomes a big one.
I would encourage you to get in contact with us as early as possible if you’re
concerned. This will give us both time so we can begin planning a workable
solution to your financial difficulties or arrears.
Kind regards,
Jeremy Masding
Chief Executive Officer
permanent tsb
1.
Contents
•
•
•
•
•
•
•
•
What is the new code?
Definitions
A step by step guide for SMEs in or facing financial difficulties
Business Information that may be required
Assessment and Decision
Appeals
Additional Information
How to contact us
2
2-3
3
4
5
5
5-6
6
What is the new Code?
The Central Bank of Ireland has published a revised statutory Code of Conduct for
Business Lending to Small and Medium Enterprises (the SME Code) setting out
new requirements for lenders when dealing with Small and Medium Enterprises
(SMEs) in or facing financial difficulties.
We recognise that individual SME customers will vary by size, sector and type of
credit product(s) held with the Bank and therefore each SME customer in financial
difficulties will be dealt with on a case by case basis. This will enable the Bank to
adopt a flexible approach to dealing with each customer’s situation.
If you would like a copy of the Code of Conduct for Business Lending to Small and
Medium Enterprises 2012, it is available to download from the Financial Regulation
section of the Central Bank of Ireland website, www.centralbank.ie.
Definitions
‘small and medium enterprises’ and ‘SMEs’
SMEs are enterprises which employ fewer than 250 persons and which have an
annual turnover not exceeding e50 million, and/or an annual balance sheet total not
exceeding e43 million and shall include ‘smaller enterprises’.
‘smaller enterprises’ is the following sub-category of small and medium
enterprises:
a) a natural or legal person or group of natural or legal persons, but not an
incorporated body with an annual turnover in excess of e3 million in the
previous financial year, acting within their business, trade or profession (for
the avoidance of doubt a group of persons includes partnerships and other
unincorporated bodies such as clubs, charities and trusts, not consisting entirely
of bodies corporate) or
2.
b) incorporated bodies having an annual turnover of e3 million or less in the
previous financial year (provided that such body shall not be a member of a
group of companies having a combined turnover greater than the said e3
million);
‘Arrears’
Arrears arise where a borrower has not met a full repayment amount, or only makes
a partial repayment amount on a credit facility, as per the terms of the credit facility,
by the scheduled date.
‘Financial Difficulties’
Under the SME Code a borrower must be classified as in financial difficulties
where:
a) The credit facility of a borrower is in arrears for three consecutive months;
b) In the case of an overdraft credit facility, where the approved limit on the facility
is exceeded by the borrower and remains exceeded for 90 consecutive days
and there has been no engagement with the borrower.
A step by step guide for SMEs in or facing
financial difficulties
1. Contact us as early as possible if you anticipate that your business may be
facing financial difficulties which may impact on your ability to meet financial
commitments to the Bank.
2. You will be offered a review meeting to discuss the financial position of your
business with a view to agreeing a solution to the arrears / financial difficulty
situation. Before the meeting we will ask you to provide up to date business
information.
3. Following the financial review we will assess your case. The outcome decision
of the assessment will be provided to you in writing.
4. If you are not satisfied with the outcome of the assessment you have a
right to appeal the decision within 10 working days of the receipt of our
correspondence.
5. We will consider and adjudicate on your appeal and provide you with a written
response to your appeal in writing within 15 business days.
We recommend those customers who are in or facing financial difficulty engage as
3.
early as possible with the Bank so that we can jointly discuss and agree a potential
solution.
Business Information that may be required
Before the financial review, we will ask that you supply certain financial information
for the Bank to complete an assessment of your financial position.
The type of information required will vary by individual SME but it may include the
following:
• Up to date financials including annual audited (or draft) quarterly management
accounts
• Cash flow projections for the next 12 months
• Up to date business plan including details of your trading performance in the
last 12 months plus outlook for the next 12 months
• Up to date list of debtors and creditors
• Estimate or independent report on property valuation (if applicable)
• 6 months current account bank statements for the business if current account is
held outside permanent tsb
• Up to date Statement of Affairs for all named borrowers, material shareholders
or guarantors as required
• Confirmation that the tax affairs of the business and named borrowers and/or
material shareholders are up to date and in order
• Completion of a permanent tsb Standard Financial Statement (SFS) where
applicable
• Any other information the Bank feels is relevant for the review and the
assessment
4.
Assessment and Decision
Following receipt of the required information, we will complete a full assessment of
your situation with the view to providing you with an alternative repayment /payment
option appropriate to your circumstances. Please note there may be cases where
permanent tsb will be unable to provide an alternative repayment arrangement.
We will communicate to you in writing details of the outcome of the assessment
based on the information provided by you within 15 working days of receiving all of
the requested information.
Appeals
permanent tsb has an appeals process in place for customers who wish to
appeal credit decisions made by the Bank following the financial review and
assessment for an alternative repayment arrangement.
Our Appeals Process
You have a right to appeal our decision on your request for an alternative repayment
arrangement to our SME Appeals Board.
If you decide to appeal, please send your appeal in writing up to 10 business days
from the date of the letter you receive from permanent tsb outlining the decision
on your case.
The Bank will consider any appeals made in full and will respond to you within 15
working days of receiving your appeal and any additional information requested
from you to support the appeal.
The appeal letter should be sent in writing to: SME Appeals Board, c/o Customer
Relations Department, permanent tsb, Church Yard Lane, Douglas, Cork.
Additional information
Fees and Charges
Where a scheduled payment is not made to a loan account by the due date or
where a current account is overdrawn by an unauthorised amount an additional
interest may apply to the arrears or unauthorised balance amount.
The additional interest is applied in addition to the annual interest rate applicable
to the individual account. Please note that in some cases, referral item or unpaid
charges may also apply if an account is in arrears or exceeds an agreed credit limit.
Further details on fees and charges for business customers are available in
5.
the ‘Personal and Business Banking Charges’ brochure which is available
on our website at www.permanenttsb.ie/aboutus/needhelp/productsupport/
bankingcharges/
You may be able to avoid some of these charges by keeping your account within
the agreed limits.
You can check your balance and any arrears amount due online and over the phone
through Open24 on 1890 500 121. Their opening hours are Monday to Friday
8am to 10pm and on Saturdays from 10am to 2pm (excluding Bank Holidays).
Right of Set-off
permanent tsb has a right of set-off to any credit balance held by a customer
to reduce the arrears balance. Please refer to the terms and conditions for any
account(s) you hold with us.
Communication with the bank
Failure to engage and co-operate with the Bank may result in you not being treated
as a financial difficulties case which may result in the SME Code not applying to
your situation.
Impact of Arrears on Credit Rating
Your credit rating may be affected by arrears on your account. Where applicable,
Irish Credit Bureau records are updated when arrears arise on accounts. This may
also have an impact on your ability to avail of additional credit products in the future.
How to contact us
Are you in financial difficulties or do you think you are about to go into arrears on
your credit facility or loan agreement?
Visit or call your local permanent tsb branch to make an appointment to speak to
one of our advisors. To find the address and contact details for your local branch
check out our branch locator on our website www.permanenttsb.ie.
Are you in arrears on your credit facility or loan agreement and having difficulty in
meeting your repayments?
Contact our Arrears Support Unit on 01-6695053. Their opening hours are 9am to
5.15pm, Monday to Friday (excluding Bank Holidays).
Their address is Arrears Support Unit, permanent tsb, 56-59 St. Stephens Green,
Dublin 2
6.
permanent tsb p.l.c. is regulated by the Central Bank of Ireland.
BMK2303 6/2012