“Even a year on from the banking royal commission, banks and other large financial institutions are more focused on passing on their punishment to small businesses,” Ms Carnell said.

“For instance, many small businesses in the financial planning industry have faced financial ruin in the aftermath of the banking royal commission, with hundreds of planners bearing the brunt of brutal restructures and fire sales by banks and wealth funds.

“Many of these small business owners are facing the prospect of losing their homes, families and livelihoods as these financial institutions and banks bulldoze their way through their exit strategies.”

Ms Carnell also noted that the new-look Banking Code of Practice in effect from March this year fails to sufficiently protect small business borrowers.

“The ABA claims it has implemented the royal commission recommendations but it has not acted on all of the recommendations including one that is critical to small business,” she said.

“Commissioner [Kenneth] Hayne recommended that the definition of a small business should be businesses that apply for a loan up to $5 million and have fewer than 100 employees. Despite our repeated efforts, the code only protects small businesses with up to $3 million in total debt to all credit providers.

“What that means is that a large number of small businesses, particularly those capital-intensive businesses such as agriculture, building and manufacturing, are not covered by the code.”

Of particular concern to Ms Carnell was a new addition to the Banking Code of Practice under paragraph 115 (b) which, in effect, allows banks to take action against the small business guarantor, before enforcing recovery against the security provided by the small business borrower.

She referred to the new addition to the code as totally unacceptable and has the potential to be seriously detrimental to the small business borrower and their ability to secure guarantors.

“During the royal commission, Commissioner Hayne acknowledged the ABA Banking Code of Practice is the chief protection for small business borrowers and as such, it needs real and meaningful changes to give it teeth,” Ms Carnell said.

“While the code has been improved, the number of get-out-of-jail clauses for the banks still [dilutes] the protections for small businesses.

“We will continue to push for a better framework for a balanced relationship between banks and their small business customers.”