In March of this year, the Australian Securities and Investments Commission (ASIC) released a report outlining (amongst other things) changes to small business loan contracts which saw what they define as “unfair contract terms” being removed from small business loan contracts.
The major banks (followed by other small business lenders) started to implement the changes, and sent out communications to affected clients that these “unfair contract terms” were being removed from their contracts. The changes (detailed in Table 1 below) apply to all small business loan contracts entered into or renewed from 12 November 2016 and will be monitored by ASIC.
We have recently been engaged by small business clients who feel that they have been unfairly treated by their current lenders and are being pressured to provide very frequent reporting, heavy restrictions being placed on their lending limits and/or have been directly or indirectly encouraged to refinance.
If you feel that you are being unfairly treated by your current lender and if this is having an adverse effect on your business, you should consider:
- Seeking legal advice from an appropriate legal professional; and
- Getting in touch with us, as we may be able to restructure or refinance your lending facilities.
If you need any clarification pertaining to the above please get in contact, especially if you don’t think you have the right facilities in place to suit your business’ requirements.
Disclaimer: The information provided herein is for general information purposes only and does not constitute specific advice. It should not be relied upon for the purposes of entering into any legal or financial commitments. Specific advice should be obtained from a suitably qualified professional before adopting any investment/financial strategy.