Commonwealth Bank has announced changes to its business finance loan contracts by ensuring they are shorter, simpler and easier to understand.
The suite of changes reflects the Bank’s commitment to ensure its customer loan contracts do not contain terms that are unfair and comes after recent work undertaken with the Australian Securities and Investments Commission and the Australian Small Business and Family Enterprise Ombudsman on the terms of our small business loans.
We made a number of commitments, and we have now implemented, or are in the process of implementing, a wide range of changes flowing from this work.
Under the latest modifications, shorter and simpler terms and conditions for loans will be available for all business customers where applicable.
The removal of financial indicator covenants from loan contracts for new and existing business customers with a total credit exposure below a value of $3million.
Simplifying the language used in our loan contracts, making them easier to understand for all of our business customers.
Notice periods are also being altered to ensure our business customers are given more time ahead of loan changes. We’ll now provide 120 days’ notice ahead of loan maturity, and at least 90 days’ notice of a loan rollover decision.
Events of default involving business customers have been reduced and revised, providing greater transparency and fairness.
Commonwealth Bank Business and Private Banking Group Executive Adam Bennett said: “We are delighted that many of the improvements made for small business will also be extended to all of our new and existing business customers. The changes will mean more certainty for our customers, providing them with greater control over their finances.”
While much progress has been made, we are committed to continuing to review and improve our products and practices in order to better service our business customers.