Update for customers with business lending contracts of $1,000,000 or less
26 June 2018
Suncorp is committed to supporting small business and we wanted to let you know that we’re updating our lending contract terms and conditions to make them fairer for small business customers.
We’ve summarised the main changes below, which will apply to both new and existing customers with a business loan contract with a value of $1,000,000 or less, effective from 1 July 2018.
- Material Adverse Change clauses – we will be removing, and not relying on any clause which states that you are in default due to a general or non-specified adverse change. This means that Suncorp will not have default rights if you experience a negative change in your business circumstances unless the specific circumstance is listed in your contract.
- Other non-monetary default clauses (this refers to defaults due to something other than a failure to pay) – these will be limited to certain defined events. For many of these events, if the default can be remedied, we’ll provide you with a specified time period to do so unless there is an increase in our credit risk, for example an immediate risk to property that is provided as security for the loan.
- Financial indicator covenants – you will no longer be required to comply with most financial indicator covenants. This means that, for example, if the value of your secured property falls, but you are still making your loan repayments, you will not be in default of your loan contract or mortgage. Some financial indicator covenants may still trigger an event of review. The circumstances which may trigger a default, requiring early repayment of facilities or enforcement action will be clearly defined.
- Indemnities – we won’t rely on a general indemnity to claim losses due to any fraud, negligence or misconduct by:
- Suncorp, our employees or contractors or agents
- any receiver or receiver and manager we appoint when exercising our rights as a holder of security
- Unilateral variations – we’ll reduce our reliance on clauses which allow us to make changes to your contract at any time without your agreement and in many cases, we’ll provide you with more notice than we have previously.
Small business customers will automatically benefit from these changes, without requiring any additional action or documentation. Existing small business customers will hear more about these changes over the coming months.
There are no changes to commercial terms, key product features, or most specially negotiated conditions for existing facilities.
If you have any questions or concerns about your small business lending arrangements, please contact your Relationship Manager or call us on 13 11 75.