ASIC and the Australian Small Business and Family Enterprise Ombudsman reviewed small business loan contracts from eight lenders and found a failure to take sufficient steps to comply with the new obligations under unfair contract terms legislation.This failure is despite lenders being given a one year transition period ahead of last year's November implementation deadline, the two agencies noted in a joint media release.In their initial review, ASIC and the ASBFEO found lenders continue to use clauses of concern such as terms that: •    give lenders a very broad discretion to unilaterally vary terms and conditions of the contract;•    provide for loan 'default' (such as non-monetary default) in a very broad range of circumstances, rather than where the borrower has materially defaulted on their obligations;•    absolve the lender from responsibility for conduct, statements or representations that the lender makes to borrowers outside of the contract (otherwise known as 'entire agreement clauses'); and•    too broadly indemnify the lender against losses, costs, liabilities and expenses.Both ASIC and the ASBFEO have also reiterated their support for the recommendations made by the independent review of the Code of Banking Practice - undertaken by Phil Khoury - in relation to small business loan contracts. The additional protections for small business borrowers proposed by the code review are long overdue and consistent with the recent ASBFEO inquiry into small business loans. Banks have been resisting calls to move quickly to implement:•    a prohibition on non-monetary default clauses where the borrower is meeting their obligations under the contract;•    90 days' notice period where a loan facility will not be extended; and•    more comprehensive access to the Financial Ombudsman Service.The unfair contract term protections for consumers in the Australian Securities and Investments Commission Act 2001 were extended to cover standard form small business contracts entered into, or renewed, on or after 12 November 2016.