RLO exemption extended until 2026

Assistant Treasurer Stephen Jones and Minister for Small Business Julie Collins have announced that the Albanese government will extend the small-business responsible lending obligations (RLO) exemptions until 3 October 2026.

The National Consumer Credit Protection Regulations 2010 (the Credit Regulations) will be amended to extend the exemption for the two-year period.

The exemption currently allows small- to medium-sized enterprises (SMEs) to obtain loans or credit without assessments against RLOs under the condition that there is “a genuine business purpose”.

With the RLO exemption extension, small businesses will be able to continue to access credit when needed for purposes such as hiring more staff or upgrading facilities, according to the Treasury.

The government originally introduced the exemption during the COVID-19 pandemic in an effort to boost SME financing and was subsequently extended until 3 October 2024 in 2021.

The federal government said at the time of the exemption’s launch in 2020 that it will only apply to lenders that provide credit to existing SME customers under the circumstance that there is already an existing borrowing relationship, with a proportion of that credit being used for business purposes.

According to the Treasury, the “evidence suggests that the exemption is working well”.

“It is beneficial for small businesses, enables streamlined access to credit, and there is no substantive evidence of harm,” Treasury said.

“Extending the exemption will provide an additional two years of data to inform any future decisions of government.”

SMEs that have fewer than 100 employees or revenue of $5 million or less in the previous financial year fall under the criteria for the exemption.

Minister Jones said that 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,” he said.

“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 Collins said that “access to finance is a critical issue for small businesses”, emphasising the importance of the RLO extension.

“This is just one way our Government is delivering for Australia’s 2.5 million small businesses,” Minister Collins said.

“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.”

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.