Clear power ‘imbalance’, Royal Commission probes into small business lending
The Banking Royal Commission is currently probing into lending practices to small businesses and whether terms and conditions are too onerous.
Last year the Australian Bankers Association was forced to address the issue of its lending practices, commissioning a review into its banking code of conduct.
Cameron, Ralph and Khoury’s principal Phil Khoury conducted the review and fronted the commission today to give evidence on his findings.
Mr Khoury joins Ross Greenwood to explain what was uncovered.
“In small business lending, securities are essential or many, many business loans would not be made.
“But people were telling us that there were instances of family members being persuaded or coerced into providing guarantees that they didn’t understand in order to provide that security.”
Mr Khoury says there’s an imbalance of power between the banks and those seeking loans.
“Banks have a lot of resources, they understand the business upside down and backwards.
“An individual clearly has a knowledge imbalance in that case.”
Click PLAY below for the full interview