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Appropriate Lending Approach to Small Business

16 October 2023

The provision of credit to small business is critical to the success of the economy and the prosperity of Australians, and ABA members are committed to the success of Australia’s small business sector.
The ABA acknowledges AFCA’s work in developing a public approach to small business lending and understands that AFCA’s intention in publishing its approach to small business is to aid small business borrowers and lenders in understanding how AFCA currently approaches its determinations. However, there is a likelihood that the degree of prescription AFCA adopts in the draft SME Approach may have this effect and introduce a level of detail that goes beyond existing requirements under laws, standards, and codes.
We urge AFCA to adopt a principles-based approach based on established principles, standards, and requirements in small business lending, such as the BCOP, to ensure that lending to small businesses is not restricted and is consistent with existing requirements.

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