The bank must warn before cutting the credit to an SME
25/09/2025
If you are self-employed or have an SME, you know what a line of credit is, the commercial discount, confirming or factoring, among other financing products. Therefore, it is important to know that banks cannot change the contract overnight: institutions are required to notify at least three months in advance if they have decided to cancel or reduce your funding by 35% or more.
This communication must be carried out by a means that allows proof of receipt and with a margin time that facilitates the search for new financing alternatives and avoids liquidity problems.
In addition, in these cases, the financial institution must provide you with the document called “Financial Information-SME” free of charge within a maximum period of ten working days from the day following the notification. This report includes your financial situation, level of indebtedness, payment history and a risk rating and can be very useful to obtain financing in other entities.
Exceptions to notice
Financial institutions may cancel or reduce funding without respecting the three-month deadline in certain cases, such as:
- If you are in bankruptcy.
- If you have breached contractual obligations.
- If the credit agreement has a duration of three months or less.
Keep in mind your rights to properly plan your liquidity and demand that the entities comply with these obligations.
“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”
