BEHAVOURAL SHIFT
Patrick Schweizer, a director of Alares, says the difference in court activity reflects a structural shift in lending behaviour since the pandemic.
“After COVID, both the big banks and non-bank lenders steadily increased their court recoveries,” he says.
“However, the big banks did a U-turn in 2025 and started decreasing their court activity whereas non-bank lenders continued to increase at an even higher rate.”
Schweizer says the trend is likely linked to changes in the writing of credit risk.
“Speculating on cause and effect is always difficult but I suspect the big four are now heavily focused on very low-risk lending, particularly residential mortgages and blue-chip corporates,” he says.
“This is pushing SMEs and borrowers with less-than-perfect credit histories towards second, third and fourth-tier lenders. There has also been a relative explosion in new private lending over the past couple of years.”
Spring says the data reinforces the need for directors to fully understand the risks involved with non-bank finance.
“Non-bank funding can play an important role in certain situations but it often comes with higher costs, tighter covenants and faster enforcement triggers,” he says.
“Easy access to non-bank lending and low-doc finance
doesn’t remove a director’s responsibility to act prudently.”
“Before taking on more debt, directors need to stop, look in the mirror and be confident the decision won’t compromise the business’s long-term viability.
“Directors also need to understand how quickly conditions can escalate if trading deteriorates and why early advice is critical.”
ABOUT JIRSCH SUTHERLAND
Established in 1984, Jirsch Sutherland is a national independent insolvency specialist business and the country’s leading voluntary insolvency firm.
They provide small and mid-size accounting, finance and legal firms (and their clients) with corporate and personal insolvency services such as liquidations, voluntary administrations, receiverships and bankruptcy.
They have offices in Sydney, Melbourne, Brisbane, Newcastle and Perth and a network of regional offices; in Western Australia, they trade as WA Insolvency Solutions (WAIS).
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