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The Albanese government has extended the RLO exemption for business finance for another two years.
The Treasury has announced that it is extending the responsible lending obligation (RLO) exemption for small-business finance until 3 October 2026.
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This will enable small businesses (those with fewer than 100 employees or revenue of $5 million or less in the previous financial year) to access loans or credit without being assessed against the responsible lending obligations (RLOs), so long as there is a genuine business purpose.
While the exemption was first brought in during the pandemic as a temporary measure to boost SME finance, it was extended in 2021 so it could run until 3 October 2024.
However, this has been extended once again to “allow small businesses to continue to have access to the credit they need, when they need it”.
According to the Treasury, the decision was taken after finding that “evidence suggests that the exemption is working well”, as it was “beneficial for small businesses, enables streamlined access to credit, and there is no substantive evidence of harm”.
The National Consumer Credit Protection Regulations 2010 (the Credit Regulations) that facilitates the exemption will now be amended to extend the exemption for the two‑year period, ending 3 October 2026.
“Whether it be to hire more staff or upgrade facilities, the Albanese Government will always back small-business owners to grow their companies which power the national economy,” the Treasury said.
“This decision goes to the heart of the Government’s commitment to small business. Our Government knows small business is vital to a strong economy and we will always support them to thrive across our communities.”
Commenting on the move, Assistant Treasurer and Minister for Financial Services Stephen Jones said: “This means more businesses can access the credit they need, when they need it.
“Small businesses are the beating heart of our economy. We’ll always back small business 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.”
Similarly, the Minister for Small Business Julie Collins said: “I know access to finance is a critical issue for small businesses which is why this extension is so important.
“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.”
The banking industry has welcomed the decision, with the acting CEO of the Australian Banking Association (ABA), Vanessa Beggs, saying: “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.
“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.”
[Related: SME responsible lending exemption extended]
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