COSBOA today expressed concern that small business lending could become more difficult as a result of reaction to the current Banking Royal Commission hearings.
Peter Strong, CEO of COSBOA said today “We must be careful that we do not make business lending harder and unworkable. It is hard enough as is and indeed there are business operators who go overseas to get business loans for their Australian based business. There are instances where Australian businesses find it easier to start a business in a country like Canada than in Australia. That is a problem enough and must not be exacerbated. The issue of mistreatment of those given loans must be separated from the issue of lending.”
COSBOA has also worked one of its member associations, Commercial Asset & Finance Brokers Association (CAFBA), to develop a response to the various background papers sponsored by the Royal Commission. The CAFBA submission advocates against expanding the National Consumer Credit Protection Act 2009 (NCCP) to small businesses.
Mr Strong added “We must provide support and succour to those individuals suffering hardship or those mistreated, yet it is not seen by COSBOA members as the biggest issue we face in the finance sector. The bigger issue is a lack of access to the loans needed for businesses to survive and grow. It must be noted that there have been various activities over the last 24 months that have changed the situation for small business in their dealing with banks and for the banks in their processes.
These changes include better rigour for contracts between small business people and finance bodies and the empowering of the Small Business and Family Enterprise Ombudsman’s office (ASBFEO). These two changes by themselves have been game changers. There is also a rewrite of the banking code of conduct developed by the Australian Banking Association (ABA) with support from COSBOA, CAFBA and other business associations. The draft of the new document is currently on the ABA website comment and we expect it will be in place once ASIC, ASBFEO and others provide agreement.”
The CAFBA submission provides in depth information on the small business lending environment.