4 Feb 2013

Better bank deals for small business

7:40 am on 4 February 2013

Small business owners in Australia are being promised a fairer deal by the banks.

For a long time, small business operators have complained of high-handed treatment by banks when their businesses get into financial difficulty.

While big corporate borrowers are often given time to work through their problems, the smaller end of town frequently faces foreclosure on loans with no notice.

Now, the banking industry has agreed provide small businesses with at least 10 days notice before lenders make materially adverse changes to the terms or conditions of a loan.

However, Radio New Zealand's Sydney correspondent says the industry is resisting a recommendation by a Senate inquiry that the banks develop a separate code of conduct for small business borrowers.