Mistakes, Disputes and Official Sources
Business loan complaints in Australia: AFCA, ASBFEO, small business commissioners and official sources
How to complain about a business lender in Australia: internal dispute resolution, AFCA, ASBFEO, state small business commissioners, farm debt mediation and free counselling.
If you have a problem with a business lender in Australia, complain to the lender first using its internal dispute resolution process; under ASIC's rules most financial firms must respond to a standard complaint within 30 calendar days. If that does not resolve it, an eligible small business can take the complaint to the Australian Financial Complaints Authority (AFCA), a free external dispute scheme, provided the lender is an AFCA member and the dispute is within AFCA's limits. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and state small business commissioners can help with information and mediation, and free financial counselling is available through the Small Business Debt Helpline.
This guide is part of business loan mistakes to avoid.
Step 1: internal dispute resolution
Write to the lender's complaints team. Include:
- your business name, ABN and loan or account number;
- what happened, with dates;
- what you want (refund of a fee, correction, a payment arrangement, release of security);
- copies of relevant documents.
ASIC's Regulatory Guide 271 sets the standards for internal dispute resolution by financial firms that must have it, including the response timeframe. Keep a record of every call and email. If the lender does not respond in time, or you are not satisfied with its final response, you can go to AFCA.
Step 2: AFCA
AFCA handles complaints about financial firms that are members, including banks and many non-bank lenders. Points to know:
| Topic | What to check |
|---|---|
| Is the lender a member? | Search AFCA's member list or ask the lender; business-only lenders are not always members |
| Are you a small business? | AFCA has its own small business definition based on the number of employees |
| Is the dispute within limits? | AFCA's rules set a maximum credit facility size and compensation caps for small business credit complaints; check the current figures on its website |
| Time limits | Complaints must generally be lodged within set periods after you became aware of the loss and after the firm's final response |
| Cost | Free for the complainant |
AFCA can consider whether the lender acted fairly, including against industry codes such as the Banking Code of Practice. Its decisions, if accepted by the complainant, are binding on the member.
Step 3: ASBFEO and state small business commissioners
The Australian Small Business and Family Enterprise Ombudsman is a federal body that advocates for small businesses and offers dispute support. It can help identify the right path and may facilitate resolution, although it is not a court and generally does not make binding decisions on a lender.
State and territory bodies offer low-cost mediation and information:
| Jurisdiction | Body |
|---|---|
| New South Wales | NSW Small Business Commissioner |
| Victoria | Victorian Small Business Commission |
| Queensland | Queensland Small Business Commissioner |
| South Australia | Small Business Commissioner SA |
| Western Australia | Small Business Development Corporation |
| Other states and territories | Check the state or territory government's business portal |
Their services and powers differ. They are especially useful for disputes involving leases, suppliers and franchisors that sit alongside a lending problem.
Farm debt mediation
Several states have laws requiring a lender to offer farm debt mediation before enforcing a farm mortgage, including New South Wales, Victoria, Queensland and South Australia. Rules differ by state. Farmers in financial difficulty can also contact the Rural Financial Counselling Service, which is free.
Free counselling and other help
- Small Business Debt Helpline: free financial counselling for small business owners on 1800 413 828, listed by Financial Counselling Australia as its help line for small businesses.
- Your accountant or tax agent for ATO payment plans.
- Legal aid commissions and community legal centres may help in some cases, especially for guarantors facing the loss of a home (see personal guarantees).
- A solicitor as soon as you receive a default notice or demand; see covenants, defaults and reviews.
- Registered insolvency practitioners, including small business restructuring practitioners, for companies that may be insolvent.
Other regulators and where they fit
| Body | Role for business borrowers |
|---|---|
| ASIC | Regulates financial services conduct, including misleading or unconscionable conduct and unfair contract terms in financial products; receives reports of misconduct |
| ACCC | Unfair contract terms and conduct outside financial services, for example in supplier contracts |
| OAIC | Credit reporting and privacy complaints |
| ATO | Tax debts, payment plans, director penalties |
| AFSA | Personal insolvency and the PPSR |
| Reserve Bank of Australia | Cash rate and financial system data (not complaints) |
| Scamwatch | Reporting finance scams |
ASIC generally does not resolve individual complaints; report misconduct to it, but use IDR and AFCA for your own dispute.
Worked example: a fee dispute
A business is charged a $2,400 early repayment fee when refinancing a $120,000 loan, but its contract says the fee is 1% of the balance, which is $1,200.
- The owner writes to the lender's complaints team with the contract clause and payout statement, asking for $1,200 to be refunded.
- The lender does not respond within 30 days.
- The owner lodges a complaint with AFCA, attaching the same documents and the date of the original complaint.
- AFCA refers the complaint back to the lender for a final chance to resolve it, which commonly prompts a resolution. If not, AFCA progresses it.
Keeping the evidence simple — the clause, the statement and the arithmetic — makes this kind of dispute quicker to resolve.
Official sources checklist
- Cash rate: Reserve Bank of Australia
- Rules for lenders and unfair terms: ASIC; ACCC for non-financial contracts
- Banking Code of Practice: Australian Banking Association
- Complaints: AFCA
- Small business help: ASBFEO, business.gov.au, state commissioners
- Tax: ATO
- Security registrations: PPSR (AFSA)
- Legislation: Federal Register of Legislation
Frequently asked questions
Can AFCA order a lender to change my loan?
AFCA can make determinations within its jurisdiction, which can include compensation or other remedies. It cannot hear complaints outside its rules or limits.
Is complaining to AFCA free?
Yes for the complainant. The member firm pays AFCA's costs.
What if my lender is not an AFCA member?
You may need to use the courts, or a state small business commissioner's mediation. Check membership before you borrow.
Can I complain on behalf of my company?
Yes, an authorised director or representative can lodge the complaint for the business.
Sources
- Australian Financial Complaints Authority — eligibility, limits and how to lodge
- Australian Small Business and Family Enterprise Ombudsman — small business assistance
- ASIC — internal dispute resolution standards (RG 271) and reporting misconduct
- Financial Counselling Australia — Small Business Debt Helpline
- business.gov.au — finding your state small business commissioner
- Scamwatch — reporting scams
