Whilst every care has been made in the production of this information, it is for illustrative purposes only, so as to give you an overview of the potential cost of borrowing. It does not constitute a loan offer. Link Credit Union Ltd., or any of its staff, cannot be held responsible for any omissions, errors or other mistakes made.
SME Regulations – Who and What do they apply to?
SME regulations apply to “micro, small and medium sized enterprises” and the SME Regulations define these enterprises as follows:
A micro and small enterprise is an enterprise which employs fewer than 50 persons and which has an annual turnover and an annual balance sheet total which does not exceed €10 million.
A medium-sized enterprise is an enterprise which employs fewer than 200 persons and which has an annual turnover not exceeding €50 million and an annual balance sheet total not exceeding €43 million and which is not a micro and small enterprise.
In this context, an enterprise includes a farmer or a sole trader such as a carpenter who is borrowing for the purposes of their farm, trade or profession. It also applies to other members who borrow for a related business purpose and who may be an employee on PAYE. If a farmer or carpenter is borrowing a personal loan for (say) home improvements or a holiday this brochure does not apply. It only applies to loans for the purpose of the business/farm.
Link Credit Union is happy to lend to the SME/Agri sector.
Why were SME Regulations set up?
New SME Regulations came into effect in relation to Credit Unions from 1st January 2017. The objective of these regulations was to strengthen protections for SMEs, while also facilitating access to credit, by introducing specific requirements that regulated lenders must comply with.
These requirements include:
- Giving SME borrowers greater transparency around the application process.
- Providing SME borrowers with reasons for declining credit, in writing, that are specific to their application.
- Providing greater protections for guarantors.
- Contacting SME borrowers who have been in arrears for 15 working days.
- Warning SME borrowers if they are in danger of being classified as not co-operating.
- Expanding the grounds for appeal and setting up an internal appeals panel.
Under the new SME Regulations the Credit Union has a booklet which outlines the Credit Union’s procedures when dealing with SME’s in “financial difficulties” and gives information on the support which will be provided by the Credit Union to SME’s in this situation. The Credit Union recognises that individual SME’s may differ in size and indeed sector and therefore each SME in financial difficulties will be dealt with on a case-by-case basis.
Information Booklet for SME Lending
Information for Small and Medium Enterprises (SMEs) in Financial Difficulty