ASIC Puts Australia's Private Credit Market on Notice: What Bridging Loan Borrowers Need to Know

Key takeaway: Following the collapse of NSW-based private credit firm Bathla and ASIC's renewed warning about Australia's "opaque" private credit market in September 2026, borrowers considering bridging loans or short-term property finance must now verify their lender's Australian Credit Licence (ACL) before proceeding — and understand what regulated lending actually looks like.

What ASIC Said — and Why It Matters

On September 7, 2026, The Adviser reported that ASIC has renewed its warning over Australia's private credit market, describing it as "opaque" — meaning it lacks the transparency and disclosure standards found in regulated bank lending. This warning followed the collapse of Bathla, a NSW-based private credit firm.

Private credit includes bridging loans, property development finance, and short-term secured mortgage lending. Some operators hold valid Australian Credit Licences; others may operate outside regulatory requirements. ASIC's intervention is a clear signal: private credit is under increased scrutiny, and borrowers should check before they sign.

What Is Private Credit and Bridging Finance in Australia?

Private credit refers to lending arranged outside the traditional banking system. In property finance, the most common forms are:

• Bridging loans: Short-term loans (typically 6–24 months) used to bridge the gap between purchasing a new property and settling the sale of an existing one
• Property development finance: Funding for small to mid-size residential or commercial development projects
• First and second mortgage loans: Secured against real property, commonly used by borrowers with non-standard income or higher LVR requirements

These products serve a genuine market need. Borrowers using bridging finance are often time-sensitive — they have exchanged contracts on a new purchase before their existing property has settled. Major banks rarely offer bridging finance at all; non-bank lenders and private credit providers are the primary source.

"ASIC's scrutiny of the private credit market is ultimately good news for borrowers — it raises the bar for all operators and puts rogue lenders on notice."

How to Verify a Legitimate Bridging Loan Provider in Australia

Before engaging any private credit or bridging loan provider, borrowers should take the following steps:

1. Check the ASIC Register. Any entity providing credit in Australia must hold an Australian Credit Licence (ACL). Verify a lender's ACL number at moneysmart.gov.au using the "Check a financial professional" tool.

2. Require written fee disclosure. Legitimate lenders provide full written disclosure of all establishment fees, monthly interest rates, and exit fees before you sign any documents.

3. Look for industry membership. Membership in the MFAA (Mortgage & Finance Association of Australia) or FBAA (Finance Brokers Association of Australia) indicates a commitment to professional standards and a complaints resolution process.

4. Understand your exit strategy. A reputable bridging lender requires and documents a clear, credible plan for how you will repay the loan at the end of the term — typically sale of an existing property or refinancing to a long-term loan.

What MPFG Capital Offers in Bridging and Private Funding

MPFG Capital (ACL 553698) is a fully licensed non-bank lender with over $700 million in cumulative loan settlements. Our private funding and bridging finance products are designed for property buyers and investors who need short-term flexibility, backed by a transparent, regulated process.

Unlike unregulated private credit operators, MPFG operates within ASIC's National Consumer Credit Protection framework and applies responsible lending principles to every application. If you are considering bridging finance or private property funding, explore our private funding options or contact our team to discuss your situation.

FAQ

What is the difference between a private credit lender and an Australian bank?

Banks are authorised deposit-taking institutions (ADIs) regulated by APRA. They access low-cost funding from depositors, which typically allows lower interest rates but requires strict, standardised credit assessment. Private credit lenders use different funding sources and generally charge higher rates, but offer greater flexibility — particularly for bridging loans, development finance, and non-standard borrower profiles that banks routinely decline.

How do I check if a bridging loan provider holds an Australian Credit Licence?

Visit moneysmart.gov.au and use the "Check a financial professional" tool to search any lender by name or ACL number. Under Australia's National Consumer Credit Protection Act 2009, any entity offering credit products — including bridging loans — must hold a valid ACL. If a lender cannot provide their ACL number, that is a significant red flag.

Is bridging finance in Australia regulated?

Yes. Bridging finance provided by licensed entities is regulated under the National Consumer Credit Protection (NCCP) Act 2009, which requires licensed lenders to meet responsible lending obligations, provide credit disclosure documents, and follow ASIC-approved complaints resolution procedures. The risk ASIC identified relates to unlicensed or opaque operators — choosing an ACL-holder eliminates this category of risk entirely.

This article is general information only and does not constitute financial or credit advice. All applications are subject to credit assessment by MPFG Capital (ACL 553698).