Your Commercial Loan Has A Review Date. Most Business Owners Find Out What That Means The Hard Way.

Your Commercial Loan Has A Review Date. Most Business Owners Find Out What That Means The Hard Way.

A home loan runs its term. You make the repayments, and provided you keep making them, the bank does not come back and reassess whether it still wants to lend to you.

A commercial facility is a different animal. It typically has a review date as well as a term, and at that review the lender looks at your business again. Your financials, your security, sometimes the property itself. Not because anything has gone wrong, but because that is how the facility was written.

Most business owners sign this without registering it, because the conversation at the start is all about rate and approval. The review clause sits in the general terms, several pages past the part anyone reads closely. Then a letter arrives eighteen months later asking for financials, and it is the first time anyone has thought about it.

Here is what actually happens, and what to do about it.

Why doesn't my commercial loan work like my home loan?

Because most business lending sits outside the consumer credit regime entirely.

Australia's National Credit Code applies to credit provided wholly or predominantly for personal, domestic or household purposes, and to credit for buying, renovating or improving residential property as an investment. Lending for business purposes does not meet that purpose test, so the Code does not attach to it.

That is not a loophole or an exemption. It is simply a different body of law, and the practical consequences are real. The responsible lending obligations that sit over a home loan application do not apply. The Code's hardship notice process does not apply. Neither does the comparison rate requirement, which is why you see advertised rates presented differently in business lending than in home lending.

It is worth being precise about one thing here, because plenty of content gets it wrong. A lender will usually ask you to sign a declaration that the credit is not for a personal, domestic or household purpose. That declaration does not switch the Code off by itself. It creates a presumption, and the presumption can be rebutted. The declaration is ineffective if, at the time it was made, the lender knew or had reason to believe the credit was really for a Code purpose, or would have known had it made reasonable inquiries. The substance of the borrowing governs, not the paperwork.

What does still apply matters just as much:

•    Unfair contract terms protections reach standard form small business contracts, including loan contracts. Since November 2023 it is not only that an unfair term is void. Proposing, applying or relying on one is itself prohibited and carries penalties.

•    The Banking Code of Practice contains a substantial set of small business and guarantor commitments, and it deliberately fills this gap. Its own definition of a business customer expressly covers a customer obtaining a service for a trading or commercial purpose where the National Credit Code does not apply.

•    AFCA can consider small business lending disputes, within monetary limits that are indexed and worth checking against AFCA's current figures.

So the protections do exist. They just come from a different place, and as the next section explains, they do not come from everywhere.

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What is a commercial loan review date?

It is a point written into your facility at which the lender reassesses the arrangement, separately from when the loan has to be repaid.

Typical commercial lending general terms reserve the right to review your compliance with the loan documents, your financial position and that of anyone providing security, periodically and at least annually. That is a contract term the lender has written for itself. It is not a legal requirement and it is not standardised, which means two facilities taken out in the same month can review on completely different cycles.

The term and the review are separate things. A facility can have years left to run and still be reviewed annually throughout. Conversely, a facility can reach its final repayment date with the full balance outstanding, because it was never structured to amortise away over its term the way a home loan does.

What does the bank look at when my commercial loan comes up for review?

Broadly, whether the risk it agreed to take still looks like the risk it is actually carrying.

In practice that usually means current financial statements and tax returns, how you have performed against anything you agreed to report on, your position with the tax office, the security the facility sits over, and whether anything has changed in your ownership or structure. If the security is a tenanted commercial property, the lease and the tenant can come into it too, because for some commercial products the income that services the loan is the rent rather than your trading profit.

If your entity structure has changed since the facility was written, that will surface here. We covered what a restructure does to a lender's view of you in our guide to changing business structure and your home loan, and the same logic applies on the commercial side.

Can the bank revalue my property during the loan?

Generally yes, because you agreed it could.

Commercial lending general terms commonly allow the lender to instruct a valuer at any time it reasonably requires, over any property held as security, and to pass the cost of that valuation to you. A review is one of the moments that right typically gets exercised.

Two things are worth knowing about this.

The first is that "reasonably requires" is a real qualifier rather than decoration. The right is not unfettered.

The second is genuinely under-published. Under the Banking Code of Practice, where a subscribing bank holds a valuation of commercial or agricultural property that you have paid for, it must give you a copy of that valuation and the instructions it gave the valuer. The instructions matter as much as the number, because they frame what the valuer was asked to assess. The entitlement does not survive into enforcement proceedings, and the bank may first ask you to acknowledge reasonable limits on how you use the document. Note also that the Code does not say who pays. It conditions the copy entitlement on your having paid, and who pays is a matter for your loan contract.

Very few business owners ask for the instructions. Almost all of them are entitled to.

What is a covenant, and can it default me while I am paying on time?

A financial covenant is a term requiring you either to comply with, or to report on, specified financial parameters. The honest answer to the second half of the question is: sometimes, but far less often than the scare stories suggest, and it depends heavily on who your lender is.

The plain claim that covenants can default you while you are paying on time is true as a general statement and misleading as a description of most small business lending. For a business that meets the Banking Code's small business definition, borrowing from a subscribing bank on a standard form contract, the position is considerably more protected than that:

•    Financial indicator covenants that act as a default trigger are confined to particular categories, principally property development and listed specialised lending such as construction finance, invoice discounting, margin lending and self-managed superannuation fund lending.

•    Default clauses based on unspecified material adverse change are not permitted in a standard form small business loan contract.

•    The grounds for non-monetary default are a closed list, they must be material, and where the default can be remedied you must be given notice and time to fix it.

•    Many small business customers outside those specialised categories are required to report on financial parameters rather than being in default for missing them.

Where the risk is genuinely live is narrower and worth knowing precisely. Property development and specialised lending. Businesses that sit above the Code's small business thresholds. And lenders that do not subscribe to the Code at all, where none of these protections apply.

That last one is the point most worth your attention.

Does the Banking Code actually cover my lender?

Possibly not, and this is the assumption that catches people.

The Banking Code of Practice binds Australian Banking Association members with a retail presence in Australia. It is not a rule that applies to every authorised deposit-taking institution, and it does not reach non-bank lenders at all. A business borrowing from a non-subscribing lender has neither the consumer credit protections, because of the purpose test, nor the Code commitments described above.

There is a second trap inside the definition itself. The Code's small business test is cumulative. A customer has to satisfy a turnover limit, an employee limit and a ceiling on total debt across all credit providers, counting undrawn amounts and the facility being applied for. That last limb is the one brokers forget. A business that grows, or simply takes on another facility, can quietly cross the threshold and lose Code protection without anyone mentioning it.

This is not an argument against non-bank lenders, which are often exactly the right answer for a complex business. It is an argument for knowing which set of rules your facility actually sits under before you sign it, rather than afterwards. ASIC flagged lending practices by non-bank lenders to small business, and the use of unfair contract terms, as a focus area in its banking sector supervisory letter published at the end of September 2026.

What if the bank decides not to extend?

For a small business customer of a subscribing bank, the Code requires notice well before you need to repay in full, where you are not in default and the loan will not have been repaid by instalments by the end of its term. Commercial general terms often carry a matching commitment.

Here is the sentence worth writing down. If the bank does agree to extend or refinance, it is not required to do so on the same terms.

A guaranteed heads-up is not a guaranteed outcome, and it is not a guaranteed rate, margin or structure. The notice period exists so you have time to go to market, which is precisely what it should be used for.

What should I do in the months before my review?

Treat it as a scheduled event rather than a surprise, because that is what it is.

•    Find your review date. It is in your facility documents, and most owners cannot name it.

•    Have your financials current and clean well before it. A review conducted on stale figures is a review conducted on the lender's assumptions.

•    Know what you agreed to report on, and whether you are reporting or complying.

•    If a valuation is ordered and you pay for it, ask for the valuer's instructions as well as the report.

•    Ask what the facility would look like on renewal before the review, not after.

•    Find out whether your lender subscribes to the Banking Code, and whether your business still meets its small business definition.

And if the review is likely to go badly, the time to look at alternatives is while you still have a performing facility, not once a decision has landed.

Frequently asked questions

What is a commercial loan review date?

A point written into your facility at which the lender reassesses your financial position, your compliance with the loan documents and the security, separately from when the loan is due to be repaid. Many commercial facilities are reviewed at least annually.

Can a bank revalue my commercial property without my agreement?

Commercial lending terms commonly give the lender the right to instruct a valuer when it reasonably requires one, over property held as security, with the cost passed to the borrower. You generally agreed to that when you signed.

Can my loan be defaulted if I have never missed a payment?

It is possible, but for a small business borrowing from a Banking Code subscriber on a standard form contract, the grounds are a closed list, must be material, and generally carry notice and a period to remedy. Financial indicator covenants used as a default trigger are confined to property development and specialised lending categories.

Does the Banking Code of Practice apply to my lender?

Only if it is an Australian Banking Association member with a retail presence in Australia. Many mutuals, foreign bank branches and non-bank lenders are not subscribers.

Is business lending regulated like a home loan?

No. The National Credit Code applies to credit for personal, domestic or household purposes and to residential investment property. Business purpose lending does not meet that test, so responsible lending obligations, the Code's hardship process and the comparison rate requirement do not attach.

My facility is being renewed. Will the terms stay the same?

Not necessarily. Where a bank agrees to extend or refinance, it is not required to do so on the same terms. That is the reason to use the notice period to test the market.

How this guide was checked

Statements about how commercial facilities are reviewed, revalued and defaulted are drawn from published commercial lending general terms and from the Banking Code of Practice. Statements about which protections apply to business purpose lending are drawn from the National Credit Code's purpose test and from ASIC's published guidance. Statements about ASIC's current focus areas come from its banking sector supervisory letter published in September 2026.

Review cycles, covenant terms and valuation rights are set by each lender in its own documents. They are not standardised across the market and they change. Nothing here is a description of any particular lender's current policy.

Sources and references

•    National Consumer Credit Protection Act 2009 (Cth), Schedule 1, National Credit Code, section 5 and section 13

•    Australian Banking Association, Banking Code of Practice 2025, effective 28 February 2025, approved by ASIC

•    Australian Securities and Investments Commission, Regulatory Guide 234 Advertising financial products and services, including credit

•    Australian Securities and Investments Commission, supervisory letter on banking sector priorities, September 2026

•    Australian Securities and Investments Commission, Report 565 Unfair contract terms and small business loans

•    Australian Competition and Consumer Commission, unfair contract terms guidance

•    Australian Financial Complaints Authority, complaints we consider

•    Australian Small Business and Family Enterprise Ombudsman, Inquiry into Small Business Loans, December 2016

 

When does your facility come up for review?

If you cannot answer that from memory, that is the reason to have the conversation now rather than when the letter arrives.

We work with business owners whose structures and income take more reading than a payslip. A commercial facility review looks at what your current terms actually commit you to, what the lender is likely to reassess, whether your business still sits inside the protections you assume it does, and what the market would offer you today.

Book a 15 minute commercial and business finance strategy call or complete the Finance Square free 2-minute quiz to check your finance options. 

 

Priya Dey is the founder of Finance Square Group, a Melbourne mortgage and finance broking firm specialising in self-employed borrowers, business owners and investors.

This article is general information only. It does not take your objectives, financial situation or needs into account, and it is not credit, financial, tax or legal advice. Obtain independent legal advice about your loan documents. Lender terms, review cycles, covenants and valuation rights are set by individual lenders, are not standardised across the market, and are subject to change without notice. The protections described depend on your lender, your contract and whether your business meets the relevant definitions. Nothing on this page is a guarantee of approval or of any particular outcome at review. Individual circumstances differ.

Finance Square Group is a trading name of Sioux Property Solutions Group Pty Ltd, Credit Representative 543438, authorised under BLSSA Pty Ltd, Australian Credit Licence 391237.