In these times of crisis where credit is scarce, the Minister of Small Businesses, Sabine Laruelle, and Koen Geens, the Minister of Finance, advocate for SMEs. They have set the bar very high with a new bill that forces banks to make a real effort to facilitate access to credit for SMEs.
Already approved by the government, this set of proposals is to be effective from next autumn without retroactive effect on credit contracts already in progress.
What are the new measures?
In a context where more than half of SMEs have already given up in the face of banks’ reluctance to be more lenient in granting financing, the situation seems to be changing.
Banks will soon be required to better explain the reasons for refusals. They will also have to deploy all possible means to find a solution to each credit request before closing their doors.
According to the head of the government, these measures make perfect sense since SMEs constitute a real economic lung and a promising sector in terms of employment. More than real constraints, these measures aim to invite banks to make the information provided to their clients more transparent and to be more attentive to each request submitted to them before making a decision. If the granting of credit is refused, the financial institution will have to justify its reasons through a clear and understandable explanation.
Thanks to a deeper study of risk analysis, SMEs and independents will be able to better prepare their file before submitting a credit request. In case of failure, they will have the opportunity to better understand the origin of the problem and try to improve their profile before reapplying for credit.
The opinion of the UCM
The Union des Classes Moyennes (UCM) does not hide its enthusiasm in the face of the evolution of this situation which will undoubtedly gradually clarify the latent economic gloom that has already settled in the SME credit sector. The UCM also specifies that the claims of companies and independents are not exaggerated since the amount borrowed is generally under 100,000 euros for independents and around 200,000 euros for SMEs.
Another important point
Prepayment penalties will have to be estimated in a way that eliminates any gray areas. For a credit of less than 1 million euros, these penalties related to early repayment will be limited to a maximum of 6 months of interest. Beyond this amount, banks and SMEs will need to consult to propose a rational calculation method within three months, otherwise the government will take responsibility.
This bill promises to give a new boost to the granting of credit for SMEs, but it should not be forgotten that banks will not fundamentally change their prudential policy and that a well-constructed file will always be the best guarantee of acceptance.