Information for SME Customers in Financial Difficulties
The Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium Sized Enterprises) Regulations 2015 came into effect on the 1st of January 2017 for Credit Unions. These Regulations set out the processes that regulated entities, such as St. Colmcille’s (Kells) Credit Union Ltd., must adopt with regard to SME customers. These Regulations may be found here.
This information booklet has been put in place in order to provide information to our SME customers who are in, or who are facing, financial difficulties.
In line with those outlined by the Central Bank in the Regulations, St. Colmcille’s (Kells) Credit Union Ltd uses the following terms in this booklet:
‘arrears’ arise where a borrower has not made a full repayment, or only makes a partial repayment on a finance agreement, as per the terms of the agreement, by the scheduled date.
‘borrower’ means a small and medium enterprise including its representatives and/or agents.
‘financial difficulties’ – A borrower must be classified as in financial difficulties where: (a) the credit facility of a borrower is in arrears for three consecutive months.
“not co-operating” means a situation in which—
(a) the borrower has failed to make a full and truthful disclosure to the Credit Union of the information required by the Credit Union to assess the borrower’s financial situation, within the time frame specified by the regulated entity,
(b) the warning letter, required, has been issued to the borrower, and
(c) the borrower has not carried out the action or actions within the time frames specified in the letter referred to in subparagraph (b);
‘small and medium enterprises’ and ‘SMEs’ are as defined in European Commission recommendation 2003/361/EC, which categorises SMEs as “enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 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 €3 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 b) incorporated bodies having an annual turnover of €3 million or less in the previous