Over 130,000 Australian business owners will benefit from a complete overhaul of NAB’s existing business standard loan form contract.
Simpler contractual clauses, plain English, a major reduction in document length and one-third of existing terms and conditions have been discarded as part of NAB’s commitment to lifting standards across the industry.
NAB Executive General Manager Business Direct and Small Business Leigh O’Neill said the bank was listening and responding to customer needs and making banking simpler and fairer.
“It’s a complete transformation – what we have now is a transparent, user friendly document that is easy to read and much shorter in length. Sentences are in plain English, without unnecessary complexity,” Ms O’Neill said.
“We consulted widely with industry and customers. Essentially, if the language didn’t make sense to them, we worked through a better solution together.”
The changes come after NAB announced financial indicator covenants will no longer be used in most loan contracts for new and existing small business customers with total business lending of less than $3 million in April 2017.
“Our commitments to customers are set out very clearly- we promise to act fairly and responsibly. Our customers ask us to back them in the moments that matter- these new contracts demonstrate that we’re in this journey together.”
NAB Chief Legal & Commercial Counsel Sharon Cook said NAB is working with the wider banking industry, ASIC and customers to address concerns raised in the Small Business and Family Enterprise Ombudsman Kate Carnell’s Small Business Loans Inquiry report.
“The importance of a simple and fair contract cannot be underestimated. We’ve been simplifying across all areas of the bank and these changes are industry-leading,” Ms Cook said.
With 69 per cent of SMEs citing that dealing with red tape takes a lot of effort, freeing up the capacity of business customers to spend more time on innovating and growing is a key focus for NAB.
“SMEs say dealing with big companies and the complexity of having multiple definitions for the small business sector makes it tough for their business to succeed. That’s why we continue to call on all levels of government and the business community to take action on establishing a single, clear definition for small businesses,” said Ms O’Neill.
- Plain English
- Shorter contract length with one-third of existing terms and conditions gone
- Transparent fees and charges up front- so no hidden surprises