Important information for customers with business or equipment finance contracts of $1,000,000 or less
Are you a business customer who has entered into, renewed or varied a business finance contract or equipment finance contract of $1,000,000 or less since 12 November 2016? If so, the changes below may apply to your contract.
What is changing and what does it mean for you?
We have a strong commitment to supporting businesses and improving the way we do things. With this in mind, we’re strengthening protections under some business finance contracts and equipment finance contracts, to make them more favourable for our business and equipment finance customers. This has been done in consultation with the Australian Securities and Investments Commission and the Australian Small Business and Family Enterprise Ombudsman.
The changes apply to business finance contracts and equipment finance contracts entered into, renewed or varied since 12 November 2016 (including renewals and extensions that occur automatically when you retain goods after the end of your equipment finance contract).
The changes take effect from 10 November 2017 for business finance contracts and from 22 December 2017 for equipment finance contracts. This notice describes the changes.
This notice is in 3 parts:
|Part A:||changes affecting business finance contracts including specialised finance contracts|
|Part B:||changes affecting only specialised finance contracts|
|Part C:||changes affecting only equipment finance contracts|
|The meaning of terms printed like this is explained in the last tab below|
Is there anything you need to do?
No – you’ll automatically receive the benefit of the changes described in this notice without the need for any update to your terms and conditions (so you won’t receive new terms).
We’re here to help
If you have any concerns or questions about your small business financing arrangements, please contact your Relationship Manager or call 132 142, Monday to Friday 8:00am – 8:00pm.
Changes affecting business finance contracts including specialised finance contracts.
|Entire agreement clauses||We won’t rely on clauses that limit our agreement with you to the written finance contract. This means statements we make to you (in writing or otherwise) can form part of our agreement.|
|General indemnity clauses||
If something goes wrong, we're limiting the kinds of loss we’ll ask you to cover. We’ll:
|Unilateral variation clauses||
We’ll reduce our reliance on unilateral variation clauses. These are clauses that allow us to make changes to your finance contract at any time, without your agreement. Invoice finance contracts are an exception – see Part B for details.
Changes we can make
Sometimes we need to make changes for reasons outside our control (see below). We can also still make changes to financial terms such as margins, interest rates, payments, repayments, fees and charges (including introducing new ones), how we calculate financial terms and when we charge them. We need to be able to do this at any time in the normal course of our business.
We used to have broad rights to change other terms for any reason. However, we’ll now only make changes to your other terms if:
When we make changes, we’ll always act fairly and reasonably towards you in a consistent and ethical manner.
Notice of changes
We’ll generally give you at least 30 days’ notice of changes. Exceptions are:
|Financial indicator covenants||
We won’t require you to comply with any financial indicator covenants in your finance contract. Some examples of financial indicator covenants we won’t rely on include, maintaining a particular loan to security value ratio (LVR) or maintaining a particular interest cover ratio (ICR).
However, there are some exceptions for certain specialised finance contracts - see Part B for details.
|What can trigger default||
We’ll only require early repayment of facilities provided for an agreed term or take enforcement action against you if one or more of the following occurs (standard defaults). However, if you have a specialised finance contract, some additional defaults will apply – see Part B for details.
because of an event of default (however described) under that arrangement (but only if the event of default is of a type that would be permitted if unfair contract terms laws applied to that arrangement)
Of course, if your current arrangements give you more time to rectify something than what is described above, we’ll ensure you’re given that extra time.
|How does this notice affect “at call” facilities?|
Some facilities such as overdrafts or lines of credit are repayable “at call” or “on demand” which means we can ask you to repay them at any time. Other arrangements, including an invoice finance contract, can be terminated at any time by providing the agreed period of notice. This will continue to be the case.
Bailment contracts are also “at call” facilities. Under a bailment contract we can do a number of things at any time, including ask for repayment, require you to return bailed goods or take possession of bailed goods and otherwise act to protect our interest in bailed goods. This will also continue to be the case.
If we’ve issued bank guarantees, letters of credit or similar instruments (or endorsed bills of exchange or similar) at your request, our rights in respect of those instruments, including rights to terminate our liability, stop issuing instruments or require reimbursement from you, are not affected by this notice.
|How does this notice affect security documents?|
|If we need to enforce our rights under any securities (eg guarantees or mortgages) given to us for your finance contract, we’ll exercise our rights under those securities in a way that is consistent with our commitments described above. However, some securities may secure other arrangements we’ve entered into with you or your guarantors. Our rights under those other arrangements and corresponding supporting securities are not affected by this notice.|