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Speaking at a media briefing on Tuesday (28 July), the lender said the federal budget and a more challenging operating environment were reshaping borrower behaviour, but new doors were opening for brokers willing to move with the changes.
“We try not to have a bearish view of what’s going on in the market, but more bullish. As one rule closes, we see a whole bunch of opportunities, whether it be investors changing their strategies or even simple things like ATO debt, which is grossly neglected at the moment,” chief commercial officer Tony MacRae said.
MacRae added that Bluestone had spent the past three years reshaping the business around brokers, expanding its product suite and investing in technology to become a “one-stop shop” for specialist lending.
“Fundamentally, what we do is support customers that fall outside mainstream banking restrictions.
“Last year was really about building towards that one-stop shop ... We launched expat lending, small-ticket commercial lending and construction lending ... We rarely tell brokers we don’t do something now.”
MacRae said Bluestone had closed FY2025–26 on a $9 billion origination run rate compared with $2.4 billion three years ago and $4.5 billion last year.
Commercial SMSF to remain a focus
Bluestone said it had experienced a last-minute rush of residential self-managed super fund (SMSF) loan applications, mirroring activity seen across brokers and other lenders ahead of the federal government’s 10 August ban on new residential SMSF lending.
Nonetheless, Bluestone said that while residential borrowing activity will end, demand will increasingly shift towards refinancing existing loans and commercial property transactions once the changes take effect.
Aaron Taylor, head of non-standard lending, said the changes would create more interest in commercial SMSF lending, but warned it would not be a straightforward replacement for residential borrowing.
“I don’t think overnight we’re going to see all of the lending push into commercial,” he said.
“There’s potential for some of that to be redirected with the right investors getting the right advice ... but not everybody’s going to want to go into that.”
Richard Chesworth, Bluestone’s head of specialised distribution, added that brokers should not overlook the refinancing opportunities that remain.
“The refinancing market will be interesting whether we see a consolidation of lenders if some step out, but I think the importance is we’ve always said the refinance market has probably been underserved.”
ATO debt offers untapped opportunity
Beyond SMSF, Bluestone believes that ATO (Australian Taxation Office) debt is emerging as one of the biggest opportunities for brokers working with business clients under increasing financial pressure.
“There’s tens of billions of dollars of ATO debt outstanding, and the ATO is coming really, really hard with that,” Taylor said.
In May, Broker Daily reported that payment arrears had climbed to their highest level since January 2020.
Taylor added that the removal of tax deductibility on ATO debt interest, combined with higher business costs and Payday Super, was creating greater demand for debt restructuring.
“For a business with a million-dollar tax debt ... they’re paying 11 or 12 per cent interest on that. They have to carry that as an expense that’s not deductible.
“You’ve got Payday Super stepping through monthly, and the monthly cash flow of a business owner now is getting really, really pushed.”
Taylor added that rather than just providing finance, brokers had a chance to become increasingly close to their business clients by helping coordinate broader financial solutions.
“I think this is where the broker space really works well because they’ve got the ability to not just be a transactional broker,” he said.
“They can call in the experts and call in somebody to negotiate on the tax debt, work with the accountant to get the debt structured right to benefit the business as best as possible.”
Taylor added that when brokers worked with lenders effectively, the outcome for the client could compound.
“We’re more about cleaning up the balance sheet ... The impact back to the customer is huge. Back to the business is huge.”
Commercial lending built for residential brokers
MacRae said the lender had deliberately designed its commercial offering for residential brokers looking to diversify.
“We have targeted our commercial product at the residential broker ... We’re looking at the same customer base that just wants to diversify their portfolio into commercial. We assess the customer the same sort of way. It’s a different asset class as opposed to a different customer group.
“We were the first to deploy a commercial product on the industry standard platform, which means bread-and-butter residential brokers haven’t had to change their process to be able to diversify into commercial.”
Specialist borrowers becoming more complex
Bluestone said that with specialist borrowers becoming increasingly diverse, brokers would inevitably encounter more clients whose circumstances fall outside traditional bank policy rather than conventional credit impairment.
Taylor said specialist lending should increasingly be viewed as part of a customer’s journey rather than a permanent destination, with brokers playing a key role in helping borrowers transition back to the major banks once their circumstances improve.
“We’re here to help them from where they are today back through to a mainstream lender,” he said.
“Two to three years, they should nearly all be back across to a mainstream lender ... that’s where the broker really steps in because it’s about mapping that long-term strategy.”
Technology to simplify complexity
Technology was another key focus of the briefing, with Bluestone preparing to launch a new loan origination platform that will automate more of the application process and introduce AI-driven checks as part of its next phase of growth.
However, MacRae said lenders needed to be careful not to overcomplicate their processes as technology evolved.
“The reality is there’s a few key components of assessing a loan,” he said.
“You might have different assets or different ways of earning income that you just need to have the nuances to confirm.”
Taylor said technology would also help lenders process more complex borrower scenarios and run more effective serviceability calculations by allowing multiple policy tests to run at once.
“You can do it with a spreadsheet. You can do it quicker with technology.”
[Related: How fintechs think the broker’s role is changing]
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