Ombudsman supports primary producer loan changes

The Private Member’sBill introduced by Rebekha Sharkie MP would provide legislated protection tosmall family businesses in a capital intensive industry, such as farming,Australian Small Business and Family Enterprise Ombudsman, Kate Carnell saidtoday.

The Banking Amendment (Rural Finance Reform)Bill 2018 was introduced to the Lower House yesterday, requesting greatertransparency and longer notice periods when lenders make decisions on theconditions of primary producer loan agreements.

“During our Small Business Loan Inquiry, weconsulted with a number of small business owners involved in primaryproduction,” Ms Carnell said.

“We identified specific issues associated withlending to primary producers, many of which are family enterprises.

“Unlike consumers, thereare currently no regulation protections for small business commercial loans,and there is a significant power imbalance between lenders and farmers.

“We agree that thethreshold for a small farm business debt facility should be revised to $5 million,which is a realistic amount for a primary producer.

“Lenders should provide borrowers withdecisions on loan roll over at least 90 business days before loans mature, sothey can organise alternative financing.

“Borrowers also need greater access to informationand control in the process of loan security valuation and business reviews.

“This Bill will providea range of suitable protections for small farm businesses. It reflects therecommendations of the Select Committee on Lending to Primary ProductionCustomers and our Small Business Loans Inquiry.”

Kate Carnell, 0415662 266

/Public Release.