Banks to give business borrowers 90-day warning

GOOD NEWS – Banks who decide not to renew a Borrower’s business loans will have to give 90 days’ notice

The Australian Bankers Association has announced that business borrowers will get 90 days’ notice of whether their loans will be renewed.

The ABA was responding to the Carnell Inquiry into small business loans

Small business ombudsman Kate Carnell recommended that for loans under $5m banks should give borrowers a decision on roll over at least 90 business days before loans mature, so borrowers can organise alternate financing.

These changes will take place for all customers including brokers’ customers and come just after minister for small business Michael McCormack MP praised brokers at an MFAA breakfast last week:

“You’re assisting not just with home-loan mortgages, but financing for many small businesses. And this is as many bank branches reduce their retail footprint, making brokers the only source of financial services for many Australians.”