Business loans to franchisees are to be in the spotlight as the royal commission into banking extends its reach into small business issues.

According to Fairfax media, three case studies will concern ANZ, Westpac and the Bank of Queensland.

Under scrutiny will be loan processes such as business credit facilities, loan suitability, financial well-being, and credit assessment.

Already one franchise-related story has been heard; pensioner Carolyn Flanagan, a guarantor for her daughter’s purchase of a Poolwerx franchise, lost her home after the business failed.

Michael Hodge, counsel assisting the commission, said a number of franchisees would appear to shed light on specific bank loan approvals.