The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has welcomed the approval by the Australian Securities and Investments Commission (ASIC) of the Australian Banking Association’s (ABA) Banking Code of Practice.
“The new Code is in line with our Small Business Loans Inquiry, where we recommended the Code be revised, that it be approved by ASIC and include a dedicated section on small business written in plain language,” she said.
However, the ombudsman is “disappointed” the cap for small business loans is still set at a total loan facility of $3 million.
“We had recommended a credit facility of at least $5 million which would encompass capital intensive small businesses such as farms, building and manufacturing,” she said.
“We are pleased ASIC will monitor the extent of the Code’s coverage of small business with data collected from banks and the AFCA, and publish that data every six months.
“We will be keeping a close eye on those figures, with particular focus on industries we think require a higher lending cap, and also on ASIC’s work on the review of the small business definition.”