Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, is one critic of the banking industry hard to deflect by an introverted industry reform agenda.Carnell yesterday described the Australian Bankers Association's decision not to accept the ASBFEO's definition of a small business loan as any loan under $5million as "disappointing". The ABA released its response to the ASBFEO's inquiry into Small Business Loans on Friday. Carnell, in a media release, said: "The ABA's very restrictive definition would mean that any business with more than 20 employees would not be deemed a small business under the banking code of practice. "Equally restrictive and unworkable is their approach to their $3 million loan limit."A string of banks on Friday set out new definitions around small business loans informed, in part, by Carnell's inquiry. The ABA said: "For new or renewed contracts, banks will expand the definition of small business beyond what is required by law so that 'covenant light' contracts apply to businesses with total loans under $3 million. This will be done by no later than the end of 2017."Carnell took the view that "the ABA is saying that any business that has aggregate loans above $3 million, including loans with all financial institutions and including all associated entities, will not be treated as a small business. "This would mean that all loans taken out by directors of the business and their partners would be aggregated to determine if a loan taken out by the small business would be able to access the removal of non-financial default clauses and the other recommendations of the ASBFEO Report." Carnell said this would exclude a very large number of small businesses "and make a nonsense of the ABA's claim that its response will cover 95 per cent of business customers."