Stimulating granting of credit to SMEs

With the Act of 21 December 2013 on financing for small and medium-sized enterprises, the legislature is seeking to promote the granting of credit to SMEs, since it appears that the latter have not yet recovered from the financial crisis. To remedy this, the legislature wants to bring greater transparency into the phase before the ultimate granting of credit as well as more balance in the contractual relationship between creditor and borrower.   The law states that both creditor and borrower must act prudently, fairly and in good faith. This obligation is a confirmation of the general duty of due care and applies in both the precontractual and the contractual phase. Furthermore, the law imposes a number of additional obligations on creditors. If the borrower asks for certain “relevant information”, the creditor is obliged to give a correct and complete response to this request. What´s more, the creditor must look for the credit that is best suited for the requesting SME and, in case of refusal, must be able to give the most important reasons for this. In the meantime, the representative organisations Unizo, UCM and Febelfin have also issued a code of conduct in order to flesh all of this out more concretely.   SMEs can always repay their credit early and, in this case, the creditor can only demand a reinvestment compensation. For credits up to 1 million euros this compensation can amount to at most six months´ interest. For credits above 1 million euros, several calculation modalities that are established in the aforementioned code of conduct must be taken into account. If necessary, the compensation is limited to six months´ interest (credits up to 1 million euros) or reduced equitably by the judge (credits above 1 million euros).   Finally, the law lists several unlawful clauses that lead to an imbalance in the relationship between SME and creditor. Such clauses are prohibited and shall be regarded as null and void.