NAB floats compromise in small business loan debate

National Australia Bank has put forward a compromise in the debate over which firms should be treated as small business banking customers, a move that could pressure other banks to follow suit. Small business advocates on Friday backed NAB's move to extend protections to customers with total debts of up to $5 million, up from $3 million today, in response to the Hayne royal commission into financial misconduct. The definition is important because it gives borrowers extra protections in their loan contracts, whereas from the banks' perspective, these loans are seen as riskier. The definition is important because it gives borrowers extra protections in their loan contracts, whereas from the banks' perspective, these loans are seen as riskier. NAB, the country's biggest small business lender, on Friday said it would treat firms borrowing up to $5 million as small businesses. But it did not go as far as the commission's recommendation, which would entitle businesses taking out multiple loans of less than $5 million to small business protections.