What Licences Do Lenders & Mortgage Brokers Need in Australia?8 min read

Introduction

Lenders & mortgage brokers in Australia do not all need the same licence. Whether an Australian Credit Licence (ACL) applies depends on the activities performed, the type of credit, the borrower & the business structure under the National Consumer Credit Protection Act 2009 (Cth) (‘NCCP Act’).

A lender or mortgage broker may also need credit representative authorisation, an Australian financial services (AFS) licence, Australian Transaction Reports and Analysis Centre (AUSTRAC) enrolment, Australian Prudential Regulation Authority (APRA) registration or other operating arrangements. This overview explains how ASIC credit requirements, responsible lending obligations & related registrations may apply to different lending models.

Australian Credit Licence Requirements for Lenders & Brokers

Lenders & Credit Providers

A lender will generally need an ACL or authorisation from a credit licensee before engaging in credit activities regulated by the NCCP Act. Credit activity includes:

• providing credit under a credit contract;
• benefiting from a mortgage or guarantee connected with that contract; or
• exercising a credit provider’s rights or obligations.

The requirement depends on the type of credit and whether the National Credit Code (Cth) (‘NCC’) applies. Consumer credit, including relevant residential investment lending, may require ACL coverage where the business provides credit or carries on a business of providing credit.

Mortgage & Finance Brokers

A mortgage broker may need ACL coverage when providing credit assistance or acting as an intermediary between a consumer and a credit provider. Credit activity includes:

• suggesting that a consumer apply for a particular credit contract;
• assisting with an application; or
• arranging contact between the consumer and credit provider.

A lender or broker must assess the activities performed rather than assume that one licence covers every lending model when considering Australian Credit Licence applications for lenders and mortgage brokers.

A business that only provides factual information or refers a consumer to a credit licensee may fall within an exemption if the relevant conditions are met.

Operating as a Credit Representative

A broker may operate without holding its ACL if authorised as a credit representative of a credit licensee. The authorisation must cover the specified credit activities, which may include credit assistance but does not automatically permit the representative to provide credit.

Before authorisation, the licensee must:

• Authorise the representative in writing;
• Confirm adequate training and competence;
• Conduct relevant background checks; and
• Confirm current Australian Financial Complaints Authority (AFCA) membership.

A credit representative’s authorisation has no effect if AFCA membership is absent when the authorisation is given. The authorisation also ceases to have effect if AFCA membership later ends.

Commercial & Non-Consumer Lending

Business loans are not regulated under the NCCP Act or the NCC. Commercial lending may therefore fall outside the ACL regime that applies to regulated consumer credit, although the business structure or other activities may create separate obligations.

The small business exemption is not a licensing exemption. It removes responsible lending obligations for genuine small business loans; it does not remove the need for an ACL where the relevant credit activity is otherwise regulated. From 4 October 2026, the exemption applies for a further 10 years to mixed-purpose loans where the genuine small business purpose is not minor or incidental.

Australian Financial Services & Market Licence Requirements for Australian Businesses

Credit Funds & Managed Investment Schemes

Raising investor capital to fund loans may involve a managed investment scheme. If the scheme is offered to retail clients, the operator must register it with ASIC under Section 601ED of the Corporations Act 2001 (Cth) (‘Corporations Act’).

The responsible entity of a registered scheme must be a public company holding an Australian Financial Services Licence (AFSL) authorising it to operate the scheme under Section 601FA of the Corporations Act, making AFSL compliance and regulatory advice for responsible entities relevant to the scheme’s operation.

The AFSL must also cover other financial services provided while operating the scheme.

Marketplace & Peer-to-Peer Lending

Marketplace lending platforms will generally need both an AFSL and an ACL where retail investors fund consumer loans. The AFSL may cover the financial services connected with the investment structure, while the ACL applies to credit activities involving consumer borrowers.

The required credit authorisations depend on the platform structure. For example:

• a platform operator, custodian, or investor may be the credit provider; and
• the platform may provide credit services by assisting consumers or acting as an intermediary.

Consumer loans also trigger responsible lending obligations under the NCCP Act.

Other Financial Products & Services

An unregistered managed investment scheme available only to wholesale clients does not need registration. However, the provider may still need an AFSL covering financial product advice, dealing, custodial services or depository services connected with the scheme under the Corporations Act.

Appointing a custodian with an AFSL covering custody does not necessarily remove the provider’s own licensing requirement. The provider may still need authorisation for custodial or depository services relating to scheme assets.

Australian Market Licence Requirements

Some lending platforms may operate a financial market where they regularly make offers to acquire or sell financial products. This may occur where a platform facilitates offers for investors to acquire debentures issued by borrowers.

Under Section 767A of the Corporations Act, such a facility may fall within the definition of a financial market. The operator will generally need an Australian market licence or an available exemption.

AUSTRAC & AML/CTF Requirements for the Lending Industry

Lenders & Loan Services

Making loans is a designated service under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (‘AML/CTF Act’). A lender providing this service with a geographical link to Australia must:

• enrol with AUSTRAC;
• meet anti-money laundering obligations;
• complete customer due diligence;
• maintain an AML/CTF program; and
• satisfy reporting requirements.

Lenders are not “Tranche 2” entities because making loans has always been a designated service. AUSTRAC Online has split the former “Loan services” category into:

• Making loans; and
• Guaranteeing loans.

The category change does not create a new licensing requirement under ASIC’s ACL regime. AUSTRAC enrolment is a separate regulatory obligation.

Brokers & Financing Arrangements

A mortgage broker or financing intermediary may also provide a designated service when arranging, planning or executing a transaction for equity or debt financing relating to a body corporate or legal arrangement. Under Section 4 of table 6 to the AML/CTF Act, the service must be provided in the course of carrying on a business.

This broker and financing-intermediary category commenced on 1 July 2026. General advice about funding options is not enough by itself. The service must involve active steps that directly advance a financing transaction, such as negotiating, structuring or executing the transaction.

APRA Authorisation & Registration Requirements for Non-Bank Lenders

Authorised Deposit-Taking Institution Licence

A lending business carrying on banking business requires authorisation from the APRA as an Authorised Deposit-Taking Institution (ADI). Section 8 & Section 9 of the Banking Act 1959 (Cth) (‘Banking Act’) govern restrictions on carrying on banking business.

A non-bank lender that provides finance without carrying on banking business does not require ADI authorisation solely because it lends money. The business model, including whether it accepts deposits, determines whether the ADI framework applies.

Registered Financial Corporations

A larger non-bank lender may need registration as a Registered Financial Corporation (RFC) with APRA. Section 7 of the Financial Sector (Collection of Data) Act 2001 (Cth) (‘Financial Sector (Collection of Data) Act’) applies to a corporation carrying on business in Australia that has assets above $50 million and is involved in borrowing money or providing finance.

The definition of providing finance includes:

• lending money;
• funding or originating loans;
• acquiring debts;
• purchasing bills of exchange; or
• buying debentures.

RFC registration supports APRA data collection but does not make the corporation an APRA-supervised regulated entity.

Other Regulatory Requirements for Lenders & Brokers

AFCA Membership

AFCA membership is required for a credit representative before authorisation is given, as explained above. The one exception is where the representative is authorised only for specified low-cost credit activities that do not involve collecting repayments.

Professional Indemnity & Compensation Arrangements

The requirements described for an AFSL focus on adequate resources, conflict-management arrangements and risk management systems. Under Section 912A of the Corporations Act, an AFS licensee operating a registered scheme must maintain resources suitable for its operations, including financial, technological and human resources.

The licensee must also maintain adequate risk management systems covering risks such as:

• cyber security;
• fraud;
• loan defaults; and
• market changes.

Qualifications, Competence & CPD

ASIC requires credit representatives to be adequately trained and competent for the credit activities authorised by the credit licensee. The licensee must determine suitable training when appointing a representative and while the representative continues to act.

A representative providing third-party home loan credit assistance must:

• hold at least a Certificate IV in Financial Services (Finance/Mortgage Broking); and
• complete 20 hours of continuing professional development each year.

These requirements apply to a mortgage broker representative whether the person operates under an ACL or through another credit licensee.

Industry Accreditation & Aggregator Requirements

Lender-panel accreditation, aggregator arrangements and professional-body membership are commercial requirements rather than separate statutory licences. A mortgage broker may need accreditation to access a lender’s products or operate through an aggregator, even though that accreditation does not replace an ACL or credit representative authorisation.

ASIC expects credit licensees to train representatives at least to the level of any applicable industry standard for the relevant credit sector or product. A good broker may therefore need to satisfy both legal competence requirements and additional accreditation conditions imposed by lenders, aggregators or professional bodies.

Conclusion

Lenders & mortgage brokers do not share one universal lending licence: ASIC, ACL & NCCP requirements depend on the activities performed, the credit type, the borrower, the funding model & the business structure. A business may need an ACL or credit representative authorisation, an AFSL, AUSTRAC enrolment, APRA registration or authorisation, alongside responsible lending, training, competence & supervision requirements.

With that framework in mind, contact AFSL House’s ACL application lawyers for lenders and mortgage brokers to request a consultation with its regulatory & compliance specialists. The team can assess the proposed lending or mortgage broker model, identify relevant licences, authorisations & registrations, & help reduce uncertainty before operations begin.

Frequently Asked Questions