AFCA Alerts SMEs to Risks of Unregulated Lenders Amid Complaint Surge

The Importance of Verifying Lender Credentials for Small Business Loans

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Australian Financial Complaints Authority (AFCA) has issued a warning to small businesses regarding the risks associated with unregulated lenders.

This comes in response to a notable increase in complaints that AFCA cannot address due to the lenders' lack of membership in the authority.

In the last financial year, AFCA received a record 4,648 small business complaints, with 2,063 related to finance. However, 21% of these finance-related complaints were closed because the lenders were not AFCA members, leaving business owners without recourse through the authority.

AFCA's lead ombudsman for small business, Suanne Russell, highlighted the growing concern over this trend, emphasizing the importance for SMEs to verify a lender's membership status before securing finance. Businesses can check a lender's membership through AFCA's online resources.

For small business owners, this serves as a crucial reminder to conduct thorough due diligence when seeking financing. Ensuring that a lender is regulated and a member of AFCA can provide a layer of protection and access to dispute resolution services if issues arise.

Published:Wednesday, 19th Nov 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Australian SME Manufacturers Report Robust Sales Growth in Q3 2025

21 Dec 2025: Paige Estritori

In the third quarter of 2025, Australian small to medium-sized enterprise (SME) manufacturers demonstrated notable resilience, achieving a 9% increase in sales compared to the previous quarter. This growth brought the average sales figure to $625,400, marking a significant recovery from the subdued performance observed earlier in the year. - read more

New Banking Code Strengthens Safeguards for Australian SMEs

21 Dec 2025: Paige Estritori

Effective 28 February 2025, the Australian Banking Association's revised Banking Code of Practice introduces significant enhancements aimed at bolstering protections for small and medium-sized enterprises (SMEs). This update marks the first revision in four years and reflects a concerted effort to address the evolving needs of the SME sector. - read more

Click for more Finance News

Business Loans Articles

The Foundation of Your Future: Key Elements of a Solid Business Plan

Starting a small business is an exciting venture, but it requires careful planning to ensure long-term success. One of the foundational steps in this journey is creating a solid business plan. A business plan serves as a roadmap, guiding your actions and decisions as you build and grow your business. - read more

The Rise of Alternative Lending: What Small Businesses Need to Know

Alternative lending refers to financial services provided by non-bank institutions. These lenders offer various financing options to individuals and businesses who may find it challenging to secure loans from traditional banks. - read more

Need Help Finding a Loan?

All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Knowledgebase

Cost of Capital:
The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.

This website is owned and operated by Clark Family Pty Ltd (ACN 010 281 008) as Trustee for the Clark Family Trust (ABN 35 957 893 714), 43 Larch Street Tallebudgera QLD 4228. Clark Family Pty Ltd is an Authorised Representative (AR 1298860) of Unique Group Broker Services Pty Ltd (AFSL 509434) for financial product referrals and an Authorised Credit Representative (ACR 401491) of Saccasan Pty Ltd (ACL 386297). Check our licensing details on the ASIC registers: Clark Family Pty Ltd ACR, Clark Family Pty Ltd AR, Saccasan Pty Ltd, Unique Group Broker Services.

IMPORTANT: We do not provide financial product advice or credit assistance. We act solely as an introducer and refer enquiries to licensed third-party intermediaries, insurers, and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for validating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.