Commercial lending regulation off the table ... for now

Any proposed regulation of small business credit has been deferred, as the Government now says it wants to take time to get reforms right

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Any proposed regulation of small business credit has now been deferred, as the Government now says it wants to take time to get reforms right.

 

The Government previously raised eyebrows in the commercial lending and broking sector with proposed guidelines that would have regulated commercial lending. The proposed legislation had raised concerns among brokers, who said it could restrict access to business credit.

 

According to Gadens Lawyers, Treasury has now announced it will put off any action on small business finance.

 

"Treasury's release said that the Government considers that it is important to get the reforms right, given the important role that small businesses play in the Australian economy," Gadens said.

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In deferring action, Treasury indicated that its consultations had found "a need to further examine a number of key issues" relating to business credit.
 
Gadens partner Jon Denovan previously told Australian Broker the proposed regulations had troublesome aspects, including a proposal to require a permit for commercial lending and broking and new assessment requirement he said would require brokers and lenders to ascertain whether borrowers were prepared to lose their homes as a result of taking out a business loan.
 
In spite of deferring action on small business credit, Gadens pointed out that the rest of the reforms included in Phase 2 of the NCCP are still on the table. These reforms relate to investment lending, private lending, consumer leases and anti-avoidance provisions.

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