"Small businesses are the beating heart of our economy"
The Albanese government is helping small businesses access credit when needed. Currently, small businesses can get loans or credit without being assessed under the Responsible Lending Obligations (RLOs) as long as it's for genuine business activities.
The government is extending this exemption to allow small businesses to continue securing the credit they need, whether for hiring or upgrading facilities. The move aligns with the government's commitment to help small businesses grow and strengthen the country's economy.
Exemptions are generally effective, as they facilitate easier access to credit for small businesses without causing harm. The extension will allow two more years of data collection to help with future decisions. Under the exemption, a small business is defined as one with fewer than 100 employees or an annual revenue of $5 million or less.
The National Consumer Credit Protection Regulations 2010 will be amended to extend the exemption until October 3, 2026.
Assistant Treasurer and Minister for Financial Services Stephen Jones (pictured above left) said, “This means more businesses can access the credit they need, when they need it.”
He added, “Small businesses are the beating heart of our economy. We’ll always back small businesses to provide the goods and services our communities need. By extending the program, we’ll gather more data to ensure the changes are safe and there are no adverse effects before considering next steps.”
Minister for Small Business Julie Collins highlighted the importance of access to finance.
“I know access to finance is a critical issue for small businesses which is why this extension is so important,” she said. “This is just one way our government is delivering for Australia’s 2.5 million small businesses. Our Small Business Statement outlines more than $640 million in targeted supports for small businesses to ease pressure, support small businesses to grow, and level the playing field.”
Australia Banking Association (ABA) acting CEO Vanessa Beggs (pictured above right) also emphasized the importance of accessible financing for small businesses.
“One in four SMEs report wanting to increase their capital investment, so this extension will help ensure small businesses across Australia can continue to access the credit they need to thrive and grow,” Beggs said. “In July 2024 alone, $674 billion was lent to SMEs, demonstrating the critical role of accessible credit in supporting small business growth.
“Small businesses are the lifeblood of our economy. Making it easier for them to access credit gives them more opportunities to employ Australians, upgrade their facilities, and expand their operations.
“Banks will continue to support small businesses, including ensuring credit or loans are readily available and accessible,” Beggs said.
