RedZed's Calvin Cordle says the government's residential SMSF lending ban lacks evidence and risks failing self-employed Australians
The federal government's ban on residential SMSF lending lacks any supporting data or modelling, says to Calvin Cordle (pictured), a senior executive at non-bank lender and self-employed specialist RedZed.
Speaking to MPA following the government's announcement, Cordle said the decision came as a surprise, particularly given earlier signals from Canberra. "If we reflect on last year, when the question was put to the government, their response was that they would not intervene in SMSFs," he said. "Based on that guidance, we planned accordingly and continued to invest in and grow within this space."
Cordle was direct in his criticism of the policy rationale. "To date, we have not seen any modelling or evidence that justifies this ban," he said, adding that SMSFs are highly regulated structures used by small business owners and self-employed individuals to plan for retirement.
To gauge the sentiment on the ground, RedZed conducted one of its largest post-Budget surveys of small business owners, drawing more than 400 respondents. The overwhelming feedback, Cordle said, was that measures like this risk undermining confidence and long-term financial planning – and represent yet another example of policy that fails to appreciate the realities of self-employment.
RedZed was one of eight non-bank lenders to co-sign a joint industry statement released on Thursday, alongside Pepper Money, Liberty Financial, Resimac, Firstmac, Bluestone Home Loans, Thinktank, and ColCap Financial Group. The statement warned that the ban would lock ordinary Australians out of property-backed retirement planning – not just wealthy investors.
The signatories cited data showing SMSFs currently hold approximately $75 billion in limited recourse borrowing arrangement (LRBA)-supported assets backed by $28.9 billion in debt, with average gearing of just 39% – well below comparable residential lending outside superannuation. The government itself has acknowledged that LRBAs represent less than 1% of total residential property lending annually.
The group also took aim at the ban's rushed implementation, with a transition period of just 45 days after Royal Assent.
Impact on clients and lending alternatives
While RedZed is absorbing the change, Cordle said the human cost should not be overlooked. "We are disappointed for our clients, as this decision removes another avenue that Australians have used to build wealth and long-term financial security through their SMSFs."
He emphasised that the lender's commitment to its self-employed customer base remains firm. RedZed will continue offering lending solutions for borrowers using company or trust structures – a segment many banks recently exited. "Whatever the borrowing structure, we remain committed to providing flexible lending solutions," Cordle said.
Non-bank lenders such as RedZed stepped into the residential SMSF lending space after the major banks withdrew roughly a decade ago, making them the de facto providers for this borrower cohort. Despite the disruption, Cordle said the team at RedZed continues to grow, "enabling us to deliver the personalised service our customers need now and into the future".
Notably, the ban applies to residential property only. Commercial SMSF lending remains unaffected, and Cordle sees continued demand in that area. "This segment is likely to remain an important avenue for those seeking to build long-term wealth within a regulated framework," he said.
