A year to remember for non-banks

Budget reforms, closer regulatory scrutiny and rising offshore capital have hit non-bank lending all at once. The sector’s response suggests its flexibility is more than just a selling point

ON 10 AUGUST, thousands of self-managed superannuation funds (SMSFs) raced to settle loans before a legislated ban on limited recourse borrowing arrangements (LRBAs) took effect. For non-bank lenders watching from the other side of the settlement queue, the date marked another visible sign of the federal budget-driven reshuffle now working through the sector, as changes to negative gearing and the capital gains tax (CGT) discount on investment properties combine with the SMSF ban to test loan books built on assumptions that no longer hold. Brokers are absorbing much of that change directly, fielding client questions about deals that were approved on one set of rules and may now be reassessed under another. But rather than marking the end of an era, how non-banks end up responding to the SMSF ban can also be placed inside a much broader pattern that offers clues as to the future direction of the sector.

The immediate task is protecting deals already committed to paper. “In terms of how lending is adjusting, the priority right now is protecting customers already in the pipeline. If a loan relied on negative gearing for serviceability, it may no longer meet servicing requirements when it comes back to us for formal approval,” says Azzopardi. For Bluestone Home Loans, the changes directly impacted its own SMSF business. “We’ve seen a short-term boost in residential SMSF as the 10 August date approached, although we expect this to slow now,” says Tony MacRae, chief commercial officer at Bluestone.

MacRae sees the structural housing shortage that predates the current budget cycle as key. “Australia continues to have a chronic shortage of housing supply and building costs remain high,” he says. “Budget changes may result in some customers looking at diversifying their investment into commercial or construction, which will be areas of growth, but overall we see any downturn as only being short term.” Azzopardi sees the recent legislative changes as shifting demand within the sector. “Two areas really stand out. The first is commercial lending. With the ban on limited recourse borrowing for residential property in an SMSF, we expect a good deal of that investor appetite to move toward commercial, and as a specialist non-bank, we’re well placed to meet it. The second is reverse mortgages. Australia’s population is ageing, and a growing number of retirees are asset-rich but cash-poor, so demand for responsible equity-release solutions is only expected to grow.” This year’s disruptions have been larger and more unexpected than usual, but non-banks are flexible by nature. Times like these are when that difference becomes clearer. Brokers watching how the non-bank sector responds over the coming years may learn something about which lenders are built to bend and which aren’t.

Where banks end and non-banks begin If regulators are still sorting lenders into banks and non-banks, the lenders themselves increasingly aren’t. Funding models, technology and distribution have converged to the point where the old labels tell brokers less than they once did. “The lines between different types of lenders are becoming increasingly blurred, so the traditional labels probably matter less than they once did,” Lemon says. “For brokers and customers, the more important question is who can provide the right solution. Different lenders will have different strengths, and the focus should be on matching the customer’s circumstances with the lender, product and policy that best suits them.” MacRae frames the same shift around who non-banks are built to serve. “Non-banks like Bluestone exist to help customers that the banks either make it too complex for or won’t deal with, whether that be self-employed borrowers, new ventures, varying timing and sources of income or customers who have had a financial hiccup,” he says. “As more and more customers fall into these groups, we continue to play an important role in ensuring all customers have access to homeownership.” Azzopardi puts a similar point more bluntly. “I think the distinction between bank and non-bank is becoming less meaningful with each passing year,” he says. “Today’s lending market is defined more by capability, service and customer outcomes than by lender category. From a borrower’s perspective, what matters most is finding the right solution for their needs. The market is increasingly about flexibility and specialisation rather than whether a lender is classified as a bank or non-bank.”

Money from further afield Offshore capital has moved from a footnote to a growth story, and Brighten’s most recent transaction shows why. “International capital is playing an increasingly important role, and represents a significant growth opportunity for the sector,” Azzopardi says. “For non-banks like us, offshore investors mean deeper, more diverse funding, which supports larger deal sizes, greater competition and, ultimately, more choice for borrowers.”

Homeownership is a fundamental part of the Australian dream. However, the path can be challenging, especially when traditional lending can be strict and unforgiving. We’re here to change that. Since 2000, Bluestone Home Loans has been helping borrowers with complex or unique financial situations access the market with confidence – offering a chance to purchase property, when others won’t – by offering tailored lending solutions. We empower brokers to serve a broader range of clients, from self-employed professionals to borrowers with past credit issues or those seeking niche lending options. With a 25-year legacy, Bluestone Home Loans has become a trusted leader in the Australian lending market, known for delivering innovative, flexible and straightforward solutions that break the mould of traditional lending.

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Non-banks are adept at recalibrating when goal posts are suddenly moved. When major banks walked away from SMSF lending in 2018 amid falling property prices and tightening credit conditions, it was non-banks who took up the SMSF mantle. Another example is when APRA capped growth in investor and interest-only lending in 2014 and 2017 – banks lifted rates on those loans to stay under the limit but non-banks, which weren’t bound by the same caps, didn’t follow suit and picked up a growing share of that lending as banks pulled back. The non-bank sector’s appeal to brokers has long rested on it being able to bend where the banks can’t, resulting in faster movement into new products or quicker adaptation to what a borrower actually needs rather than what a policy allows for. Just as non-banks adapted in the past to unexpected change, how the sector responds to this year’s disruption may say more about its broader appeal to brokers than any single product ever could. Loans caught mid-flight Aside from the ban on LRBAs and the removal of negative gearing and the CGT discount, there is also the issue of conditional approvals. For brokers holding live conditional approvals, the budget’s changes have created a problem with a deadline attached. Some loans were serviced on the assumption that negative gearing would apply, an assumption the federal budget has now removed. Jason Azzopardi, chief executive officer of non-bank Brighten, sees this as the most urgent matter stemming from the federal budget. “Many brokers have live conditional approvals that relied on negative gearing for serviceability, and those loans are likely to be reassessed,” he says.

Jason Azzopardi

Brighten

Industry experts

Tim Lemon is national sales manager at MA Money, bringing more than 20 years of experience across the finance and non-bank lending industry. Throughout his career, Lemon has developed deep expertise in broker distribution, non-prime lending and relationship management. He is passionate about building high-performing sales teams, strengthening broker partnerships and delivering practical lending solutions for a diverse range of customers. During his three years with MA Money, Lemon has played a key role in the business’ significant growth and position in Australia’s non-bank lending market.

MA Money

Tim Lemon

Jason Azzopardi is chief executive officer of Brighten, bringing more than 25 years of finance industry experience. Before joining Brighten, he was CFO of ASX-listed non-bank lender Resimac, where he also led Manila operations and served as CEO of Resimac NZ. Azzopardi has also held senior roles at Bankwest, Macquarie Bank and UK private equity firms Fortress and 3i. He is a fellow of CPA Australia and a graduate of the Australian Institute of Company Directors.

Brighten

Jason Azzopardi

Broker education sits alongside that underwriting, MacRae adds. “Through an education-first approach with our broker partners we ensure that brokers are also aware of their obligations to assist them in meeting their best interest duty requirements, whether that be product guidance, compliance requirements or process assistance. We also have a mature risk and compliance framework that gives us confidence to meet and exceed regulatory scrutiny.” Azzopardi argues that scrutiny is itself a marker of how far the sector has come. “The scrutiny demonstrates the increasingly important role the non-bank lending sector plays in Australia’s economy,” he says. “We support sensible oversight from regulators, such as ASIC, that seek to improve the industry standards around transparency, responsible lending and customer confidence.” For Brighten, that support extends to how it prepares brokers for its own newer products. “We believe strong regulation builds trust, improves customer outcomes and helps lift standards across the industry. We’re already acting on it, backing brokers with education and BDM support so they can support customers who are vulnerable or need extra care,” he says. Brokers hold the line Major banks have continued to invest in proprietary, direct-to-customer lending, yet non-banks don’t expect that to erode the broker channel. “Direct-to-customer lending has always had a place in the market, and we expect it will continue to,” Lemon says. “But borrower circumstances are becoming increasingly diverse. Many Australians no longer fit a traditional lending profile. They may have multiple sources of income, be newly self-employed, rely on bonuses or commissions, be living and working overseas, or have a credit event in their history.” A broker’s advantage, he says, is breadth. “A broker can look across the market rather than being limited to one lender’s products and policies. That ability to match a customer’s circumstances with the right lender is why we believe the broker proposition will remain strong.” Bluestone lends exclusively through the broker channel, and MacRae sees that structure as a strength rather than a constraint. “Brokers have thrived over time on providing strong advice, simplifying the application process and giving customers choice. This will not change, and we see brokers continuing to be the preferred distribution channel for what is a consumer’s largest investment or purchase,” he says. Azzopardi expects competition between the two channels to sharpen rather than settle. “Despite increased investment in direct channels, I believe brokers will continue to play a central role in the Australian lending market,” he says. “Borrowers increasingly value guidance, choice and expertise, particularly as lending becomes more complex. Strong competition between direct and broker channels will ultimately drive better customer outcomes, but the broker value proposition remains as relevant today as ever.”

“The lines between different types of lenders are becoming increasingly blurred, so the traditional labels probably matter less than they once did”

TIM LEMON,MA Money

Investor appetite has not disappeared so much as relocated, MacRae says. “We’re seeing some investors shifting to lower-priced or higher-yield properties and new builds, typical domains of FHBs. Bluestone has always been about helping customers that the banks make it too complex for or won’t help, and through continuing to work with brokers and provide both product and solutions education we’re helping brokers identify new opportunities in areas such as commercial and construction. We do believe that the downturn is a short-term reaction and that investors will adjust and return in due course.” At MA Money, the same budget pressures are showing up as a change in what customers ask for rather than whether they borrow at all. “We’re seeing a shift in borrower behaviour, with investment purchases slowing while refinance activity has increased,” says Tim Lemon, national sales manager at MA Money. “Rather than purchasing another property, some investors are looking at how they can make better use of the equity in properties they already hold,” he says. “We’re seeing similar behaviour from owner-occupiers accessing equity to pursue other investment opportunities.” MA Money’s response has been to widen its own settings rather than tighten them by introducing higher maximum loan amounts and greater lending capacity in regional areas, giving brokers more scope to support these changing borrower strategies. Scrutiny with a light touch Increased regulatory attention on private credit and non-bank lending has arrived at the same time as the budget changes, though the sector generally sees this as positive provided it does not simply copy bank rules onto a different kind of business. “We welcome appropriate scrutiny across the lending sector and believe it’s important that all lenders are operating responsibly and supporting customers, particularly those experiencing financial hardship,” Lemon says.

MacRae describes offshore funding in more foundational terms, as something that widens what non-banks can offer rather than a separate line item. “Both local and international capital play an important role in ensuring non-banks are able to help more customers,” he says. “Diversified capital sources ensure access to affordable funding and provide brokers and customers with real choice.” Lemon reads the same trend as a vote of confidence in the Australian market more broadly. “Australia is a relatively small market globally, so when international investors see value in deploying capital here, it demonstrates confidence in the strength and future of our economy,” he says. “For lenders, access to offshore capital can open up additional funding opportunities and help create a more competitive market. Ultimately, increased competition is good for brokers and their customers.” The next frontier While the events of 2026 have been disruptive, non-banks have been growing from strength to strength lately, taking some of the shine from their main street lending rivals. Keeping this momentum up will be key, and each lender points to a different idea of where future growth will come from. Lemon has his eye on technology as a major factor. “AI will be a significant area of growth for the sector, particularly in helping lenders make faster decisions and giving brokers quicker access to the information they need,” he says. “There is a real opportunity to use AI to remove friction from the lending process, whether that’s navigating policy, identifying suitable solutions or speeding up assessment and decisioning. For non-banks in particular, that combination of technology and human assessment has the potential to be very powerful.”

“Bluestone has always been about helping customers that the banks make it too complex for or won’t help”

TONY MACRAE,BLUESTONE HOME LOANS

Published 21 Sep 2026

Tim Lemon

MA Money

Brighten is an Australian-owned, full-service non-bank lender with offices in Sydney, Melbourne, Brisbane, Hong Kong, Shanghai and Manila. Through its extensive Australian broker network and aggregator partnerships, Brighten offers competitive products across full doc, alt doc, expat, non-resident, bridging, construction, vacant land, SMSF, commercial and reverse mortgages, delivering tailored lending solutions as a genuine alternative to the major banks.

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Tony MacRae

Bluestone Home Loans

Tony MacRae stepped into the role of chief commercial officer at Bluestone Home Loans in August 2023, bringing with him a wealth of experience in financial services. He spent a decade with the Westpac Group, where he served as acting CEO of RAMS and led third-party distribution at Westpac. Known throughout the industry for his ability to drive sales initiatives and strategic direction, MacRae excels at building partnerships and leading teams toward impressive business growth. At Bluestone, he is focused on empowering the company’s broker partners to better serve customers. In addition to his work at Bluestone, MacRae has dedicated the last 11 years to the Royal Flying Doctor Service South Eastern Section as a board member and treasurer. He holds a Bachelor of Economics from Macquarie University.

Bluestone Home Loans

Tony MacRae

MA Money is one of Australia’s fastest-growing non-bank lenders, with over $8 billion in loans under management. Working in partnership with mortgage brokers, MA Money offers a broad range of lending solutions across residential, commercial, bridging, SMSF, vacant land, expat and non-resident property loans, including support for self-employed and non-traditional income clients. With flexible credit assessment, responsive service and streamlined processes, MA Money helps brokers move quickly and solve more complex scenarios. The focus is on certainty, speed and practical solutions that support brokers in delivering for their clients.

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“With the ban on limited recourse borrowing for residential property in an SMSF, we expect a good deal of that investor appetite to move toward commercial”

Jason Azzopardi, Brighten

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Source: MFAA Quarterly Market Share report

40%

60%

80%

100%

Mar2018

Dec2024

Mar2025

Jun2025

Sep2025

Dec2025

Mar2026

55.3%

76%

76.8%

77.6%

77.3%

76.7%

81%

Proportion of new residential lending settled by brokers

Source: Reserve Bank of Australia Financial Stability Review, Mar 2026

Non-bank share of business credit

Around 11%

Non-bank share of housing credit

Around 4%

As of Jan 2026

Overall non-bank share of financial system assets

Around 6%

The distinction he draws is between oversight and imitation. “It’s important that regulation recognises the role non-banks play in the Australian lending market and doesn’t simply apply a major bank framework to a very different sector,” he says. “Non-banks provide genuine choice and competition, particularly for borrowers whose circumstances may not fit within the increasingly automated assessment models used by some traditional lenders.” “At MA Money, every application is assessed by a person,” Lemon says. “We don’t rely on credit scoring to determine whether we’ll lend to a customer. Instead, we look at each application on its individual merits and seek to understand the customer’s circumstances and the story behind the numbers.” Bluestone frames its own compliance as built on decades of underwriting experience rather than a response to new pressure. “We ensure the customer can afford the loan, verifying both income and expenses, and the security property is suitable,” MacRae says. “We continue to enhance our processes in approving responsible loans through experienced underwriting practices, built up over 26 years of lending, supplemented through use of data sources and AI to better identify risks and ensure we are putting the customer into the right loan.”

Non-bank market shareat a glance

81.6%

Jun2026