Receipt 1Code s 5 · Banking Code Part D
Which loan is under pressure
For a self-employed borrower, the household and the business often draw on the same money. The rules do not: which ones apply depends on what each loan is for, the same test that decides whether responsible lending applies (entry 2).
A consumer loan
The Code’s hardship notice
Credit to a person (or a strata corporation) wholly or predominantly for personal, domestic or household purposes, or to buy, renovate or improve residential property as an investment, is covered by the Code, among other conditions, and so is its hardship process.
Banks that subscribe to the Banking Code apply its financial difficulty chapter to individuals as well, in addition to the Code’s hardship provisions.
A business loan
The Banking Code, where it applies
Credit wholly or predominantly for the business is outside the National Credit Code. The Banking Code’s financial difficulty chapter applies to small business customers of the banks that have subscribed to it; the Australian Banking Association publishes the list of subscribing banks.
Receipt 2Code s 72 · Moneysmart
The hardship notice on a consumer loan
A borrower who is, or expects to be, unable to keep up the repayments can tell the lender so, orally or in writing, and the lender may ask for information before it decides; the time limits for its answer are in section 72 of the Code. Moneysmart says your lender “must consider you for financial hardship assistance” and must give reasons if it says no; its financial hardship page covers the rest, including what a lender usually asks.
A lender does not have to agree. A note to the Code says it need not change the contract, especially if it does not believe there is a reasonable cause for the borrower’s inability to pay (the note gives family violence, illness and unemployment as examples), or if it reasonably believes the borrower could not meet the obligations even with a change.
Receipt 3Banking Code of Practice 2025
Financial difficulty under the Banking Code
The Banking Code counts a business customer as a small business if, with its business group, it had annual turnover under $10 million in the previous financial year, has fewer than 100 full-time equivalent employees, and owes less than $5 million in total to all credit providers, not counting debt the National Credit Code applies to, but counting undrawn amounts on existing loans and the loan being applied for. Some businesses are never small businesses under the Code, such as listed companies and partnerships of more than 20 partners. These are the thresholds in the 2025 Code, as at October 2026.
The Code defines Financial Difficulty as being unable to repay what you owe, expecting to be unable to pay upcoming repayments, or having difficulty meeting repayment obligations, and names illness or injury, loss of employment, a pandemic and natural disasters among the possible causes. What a subscribing bank commits to, in the Code’s own order:
Contact as soon as possible
The Code asks a customer in difficulty, or their representative, to contact the bank as soon as possible, and says the sooner the contact, the sooner the bank can try to help.
A counsellor can speak for you
A customer can tell the bank, in writing with their contact details, to deal with their financial counsellor or representative instead.
Options, case by case
Where the position can recover, the Code’s examples are interest-only payments for a short period, extending the loan term to reduce repayments, or temporarily postponing or deferring payments, and it warns that these may mean paying more interest over the loan term.
Superannuation is not required
The bank will not require a customer to access their superannuation to repay a loan, unless the borrowing is for a self-managed superannuation fund.
The decision in writing
The bank will say in writing whether it will help and why, and if it agrees to change the agreement, set out the main details, including the repayments and what happens at the end of the arrangement.
If a dispute with the lender is not resolved, ASIC notes that small business borrowers can raise it with the Australian Financial Complaints Authority, if the lender is a member.
Receipt 4NDH · SBDH · ASBFEO
Free help, sorted by kind of debt
| Service | What its own site says it does |
|---|---|
| National Debt Helpline | Free advice on managing debts from financial counsellors, whose service it describes as “always free and confidential”. The Small Business Debt Helpline points to it for personal debts. |
| Small Business Debt Helpline | A free service for small business owners in financial difficulty, staffed by financial counsellors who specialise in small business; its service is “free, independent and confidential”. It says it can help owners understand a loan contract, talk to lenders and creditors, negotiate a repayment arrangement and ask for a hardship variation. |
| ASBFEO Dispute Support | An online referral tool from the Australian Small Business and Family Enterprise Ombudsman for finding the most appropriate service to help resolve a business dispute. |
The Small Business Debt Helpline lists signs that it is time to get advice. In our words, they include:
- dipping into personal savings or income to keep the business’s debts paid;
- looking at a new loan elsewhere just to meet the current repayments;
- a lender saying no to a request to change the repayments;
- fear that the family home could be lost.
Moneysmart’s first point on hardship applies to both kinds of loan: “The earlier you seek help, the more options you’ll have.”