How Bluestone rebuilt its identity as a non-standard lender

Tony MacRae (pictured, right), chief commercial officer at Bluestone, recalls an identity crisis that swept across the non-bank lending space in the post-Covid era.

Money was cheap and "most of the non-banks lost their identity". Low central bank rates allowed lenders to steer away from their specialist roots and into mainstream territory.

Bluestone, MacRae admits, wasn't immune to that drift either. But that’s what put the prominent alternative – and MacRae stresses alternative – lender on the course it finds itself on today.

Around three years ago, "we deliberately said, no, we're a non-standard lender first and foremost”, MacRae tells MPA ahead of Bluestone’s National Roadshow. It was a return to the founding purpose Bluestone was built on when it launched in July 2000: supporting borrowers who fall outside conventional bank policy, whether due to a financial hiccup, a non-traditional income structure, or specialist lending needs.

Bluestone went about rebuilding relationships and service quality, bringing in new team members it felt could properly support brokers and aggregators, having closed its proprietary channel entirely.

Part of that push also saw the creation of a dedicated head of non-standard lending role, held by Aaron Taylor (pictured, left), aimed at educating brokers on non-prime lending.

MacRae says the value of that education became obvious once he started touring broker offices directly, hearing the same admission over and over – brokers realising, in their words, "I've been letting really good business walk by our door, haven't I?"

Bluestone also went about restructuring and simplifying its funding arrangements, leading to significantly shorter turnaround times in the process – something brokers appreciate above almost anything else.

The final stage of the rebirth was getting Bluestone’s product offering up to scratch so customers didn’t flock elsewhere – the launch of expat lending, small-ticket commercial lending and construction lending happened in quick succession.

Underpinning this entire strategy was a deliberate move away from competing purely on price, or as MacRae puts it: “At the heart of what we do is solution-based lending… we’re not price driven.”

It seems to have worked like a charm: Bluestone is running on a $9 billion origination run rate compared with $2.4 billion just three years ago.

Bluestone’s seven-city National Roadshow – the penultimate Sydney event being held this Wednesday – serves as a conclusion to this regenerative period as the proudly alternative lender prepares to face the challenges ahead. Of which there are many.

The big SMSF lending ban

As every broker undoubtedly knows, there’s an SMSF lending ban on the horizon (10 August, to be specific).

From that date, new residential SMSF lending closes entirely, but the real deadline, in Bluestone’s head of specialised distribution Richard Chesworth (pictured, centre)’s view, is having "a legally binding contract of sale signed up to and inclusive of the 9th of August" – not simply securing finance approval.

He rattles off a litany of contingencies and scenarios that threw into focus just how rushed the ban was – proof that the government’s handling of the ban has left a lot to be desired.

MacRae is blunt about borrowers rushing to dive into SMSF lending ahead of the 10 August cut-off date: “The reality is if you haven't got an SMSF set up today, you're not going to get a resi property by today, you’re probably not going to find one.”

Bluestone has seen a "low-double-digit" rush of last-minute applications ahead of the cut-off date, although it's pipeline congestion rather than deal quality concerns MacRae. "I'm not worried about the quality of the credit submissions – I think we've got an excellent underwriting team that have great capability on that front,” he says.

Diversification is another pressure point right now. With residential SMSF lending curtailed, Bluestone expects brokers to lean harder into commercial, although head of non-standard lending Aaron Taylor is measured about the pace of that shift.

"I don't think overnight we're going to see all of lending push into commercial – there are going to be brokers that pull back," Taylor says. Bluestone’s push has been to make the transition as frictionless as possible, aligning to the same platforms and servicing parameters residential brokers already know.

"Our lead approach is education," Taylor notes. "It's actually helping brokers, educating them and supporting them to diversify and grow their business by making it simpler."

That said, he acknowledges not every broker will make the move: "I think there'll be a few that will head to commercial, but not everybody's going to want to go into that.”

Broader market challenges

While the SMSF lending ban and broader Budget changes are getting most of the headlines right now, there’s another large slice of the market that is getting overlooked: Australian Taxation Office (ATO) debt.

As Taylor reminds, “there are tens of billions of dollars of ATO debt outstanding, and ATO is coming down really hard on that”. Bluestone is seeing a lot of demand for refinancing existing ATO debt in order to manage monthly expenses.

On that note, small-business owners and self-employed Australians, who form the target market of non-standard lending, are facing soaring running costs and administrative burdens that are piling pressure onto their mortgage repayments. Data shows these cohorts have a higher rate of mortgage stress than PAYG earners.

But while these pains are nothing to be sneezed at, the vibe in the mortgage broking space feels generally positive right now. Bluestone has felt a sense of confidence and ‘getting on with the job’ throughout its 2026 tour, and the industry has been through far worse before.

The SMSF lending ban? “Investors will have a natural tendency to recalibrate and find a new path and that will more than likely be either lower priced, higher yielding areas or new builds which is the natural domain of first-home buyers,” says MacRae.

Channel conflict? That’s nothing new, and certainly nothing the broking industry can’t handle, especially with 81% of all new residential loans being written through brokers.

Diversification? “If you see the growth of mortgage brokers... compared to banks, over the years it's grown enormously and that trend will start happening in the commercial space,” Chesworth predicts.

Mortgage stress? Thankfully Australia’s robust non-bank lending scene prices for risk, giving SME owners and the self employed somewhere to go when the banks say no.

And while market competition could intensify as more alternative lenders pile in, “that's where we go back to our fundamentals of relationship and service and ensure that we deliver great outcomes, flexible outcomes in a timely manner”, says MacRae.