Assisting Small Businesses with Loan Applications

## CHAPTER 20: Assisting Small Businesses with Loan Applications

### Information for Small Business Loan Applicants

72. We will inform a small business on how to apply for a loan, which includes:

a) Details of the required information.

b) The expected timeframe for a decision after receiving the requested information.

73. Before you accept a loan offer, we will provide a plain English document outlining the key general terms and conditions of the loan, in addition to the disclosures required under Part 3 of the Code. This may be a separate document or part of the loan document.

74. If we decide not to approve a loan for a small business, we will provide the general reason unless it is reasonable not to do so.

## CHAPTER 21: Loan Enforcement Policies for Small Businesses

### Notice Period Before Enforcing a Loan

75. If you are a small business in default, we will give you 30 days' notice before requiring full repayment or initiating enforcement proceedings.

76. If you remedy the default within the 30-day period and no similar default occurs, we will not demand full repayment or take enforcement actions.

77. We may provide a shorter notice period, or none, if:

a) The default cannot be remedied.

b) It is reasonable to manage a material and immediate risk related to the default, your circumstances, or security value.

c) You have not remedied a default after a period given under paragraph 81.

78. For overdrafts or on-demand facilities, we may not need to give notice when requiring repayment, but if this default affects another loan, we will comply with this Chapter when enforcing that loan.

## CHAPTER 22: Non-Monetary Defaults in Small Business Loans

### Loan Terms and Conditions

79. Our loan terms will specify when we will not enforce a loan for non-monetary defaults.

### Enforcement for Non-Monetary Defaults

80. If you meet all payment obligations, we will not take default action unless:

a) You or a guarantor is insolvent or undergoes bankruptcy or similar processes.

b) Enforcement proceedings are taken against you or a guarantor by another creditor.

c) Early repayment is required under another arrangement due to a default described here.

d) We reasonably believe you or a guarantor has not complied with the law.

e) You provide incorrect or misleading information.

f) You use the loan for an unapproved purpose.

g) Your or a guarantor's assets are dealt with in breach of agreements.

h) Required financial information is not provided.

i) Necessary business licenses or permits are not maintained.

j) Required insurance is not maintained.

k) Ownership or management control changes without consent.

l) Status, capacity, or composition changes without consent.

### Actions Before Default-Based Measures

81. We will:

a) Notify you of the grounds for non-monetary default.

b) Allow reasonable time to remedy the default, with notice of this period.

82. A reasonable time will be at least 30 days unless immediate action is needed to manage risks.

### Material Impact

83. We will only act on non-monetary defaults if the event is material or likely to have a material impact on:

a) Your or your guarantor’s ability to meet financial obligations.

b) Our security risk.

c) Our legal or reputation risk if related to certain defaults.

### General Material Adverse Change Clauses

84. We will not include a general material adverse change clause as a default event in standard small business lending contracts.

### Specialized Small Business Loans

85. For certain small business loans, we may include specific covenants as default triggers, such as:

a) Property development loans.

b) Specialized loans requiring additional covenants for risk management.

## CHAPTER 23: Decisions Not to Extend Loans

### Notice Before Loan Termination

86. If you are not in default and your loan principal is not due for full repayment at term’s end, we will notify you at least 3 months in advance if we decide not to extend your loan.

87. If we choose to extend or refinance your loan, we may do so under different terms.

## CHAPTER 24: Appointment of External Experts

### Use of External Property Valuers

88. Our processes for external valuations will be fair and transparent.

89. We will clearly communicate and explain the valuation purpose to the customer.

### Providing Valuation Copies

90. If you are charged for a property valuation, we will provide a copy and related instructions, except when enforcement proceedings have started. We may ask you to acknowledge limitations on valuation use.

91. We will only appoint qualified valuers who are members of professional organizations with appropriate codes of practice.

### Appointing Investigating Accountants and Insolvency Practitioners

92. We will act fairly with investigative accountants and insolvency practitioners, managing potential conflicts of interest when appointing receivers. For example:

a) Only appoint qualified practitioners from relevant organizations.

b) Require oversight of investigative accountants’ appointments as receivers.

c) Consider alternative practitioners if relationships become unworkable.