At launch in 2017 the AABF was faced with the challenge of promoting best standards of industry practice.
Sensibly it decided not to reinvent the wheel.
The four key Operating Principles were established and the commitments that underpin them leant heavily on the British Bankers Association Lending Code that was well established at the time of launch.
Members are simply asked to confirm that they adhere to these commitments.
Provide transparent information that allows customers to make educatedfinancial decisions.
Only provide financing to businesses that can reasonably demonstratethe ability to repay their financial obligations.
Be truthful and fair in dealings with customers.
Ensure all reasonable steps are taken to protect sensitive informationand the borrower from fraud and other malicious misuse of their information.
Be truthful and fair in dealings with customers
• Treat every customer equally, determining creditworthiness based on the business’ credit/debt proposition.
• Provide marketing materials and promote sales practices that are clear and understandable.
• Monitor marketing and sales practices to ensure
transparency, honesty and fairness.
• Comply with applicable marketing laws and regulations when communicating the merits and costs of funding products.
• Ensure that commitments and promises communicated by Members sales team, website or any other marketing method can be demonstrated by results.
• Debt recovery should be undertaken in compliance
with the relevant legal frame work in which the Member operates, which in England and Wales is the Civil Procedure Rules (as amended).
• Ensure that brokers and lead generation partners are aligned with these principles and act in accordance with acceptable industry standards and practices in respect of treating customers fairly.
• If applicable comply with any regulatory and legal
requirements in respect of cooling off and cancellations periods (relevant only for FCA regulated members).
Only provide financing to businesses that can reasonably
demonstrate the ability to repay their financial
• Ensure that suitable underwriting processes exist that can determine whether the small business will likely be able to service its existing credit/debt obligations.
• Make reasonable enquiries and take assurances that the customer will use the funds for business purposes only.
• When a customer fails or defaults, treat the customer with good faith and make reasonable effort to resolve the issue in a manner that is professional and respectful.
• Adhere to the terms of the agreement with the customer; if any of the terms relevant to the funding agreement are changed then notice must be given to the customer in compliance with the terms of the agreement in question.
• Try to reasonably ensure that the funding requested is
suitable for the customer and the purpose for which the
funding is required.
• Seek to reasonably verify the other material outstanding financing obligations of the customer and to take proper account of these in each Members underwriting and decision making processes.
• Follow policies and procedures to comply with applicable regulatory and legal framework in which it operates.
• Members should retain appropriate records for regulatory reporting purposes, responsible management of their business and fair treatment of customers.
• The governance of member businesses should comply
with established principles of corporate governance in a
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