Thousands of small and medium-sized enterprises (SMEs) face being hit by cash flow pressures as a result of new regulatory compliance measures stemming from the Federal Government’s expansion of Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws to a range of Australian businesses.
From 1 July 2026, a new cohort of SMEs – which include accountants, lawyers, conveyancers, real estate agents and jewellers – must implement risk-based compliance programs, monitor transactions, verify customers and maintain detailed records for up to seven years, as well as appoint dedicated compliance officers under the updated AML/CTF laws.
Chief Legal Officer at leading non-bank lender Banjo Loans Matt Boglis (pictured) says the reforms, aimed at closing gaps in Australia’s financial crime framework, carry immediate operational and financial pressure for SMEs.
“For businesses that have never operated under these rules, compliance is more than a regulatory hurdle. It’s a real cash-flow and staffing challenge,” Boglis said.
“They need systems, processes, trained people and ongoing oversight. Without planning, it could tie up working capital and distract from growth.”
He says the timing adds urgency, with existing regulated entities required to implement changes by 31 March 2026 and finalise programs by 30 June. Newly regulated businesses must comply by 1 July 2026, despite enrolment only opening on 31 March.
Beyond operational strain, Banjo Loans warns that compliance, or lack thereof, will increasingly influence funding. Lenders are expected to treat AML/CTF readiness as a key factor in risk assessment, meaning non-compliant businesses could face difficulty securing loans or investment.
“Compliance is now part of how lenders evaluate a business’s credibility and growth potential,” Boglis said.
“Getting it wrong doesn’t just risk fines. It can hit a business where it hurts most – access to capital.”
He says that despite the short-term burden, the long-term benefits are clear, with early compliance strengthening governance, reducing exposure to financial crime and signalling credibility to lenders, clients and partners.
“These reforms will reshape risk management for SMEs. Those who act early will emerge stronger, more credible and better positioned for growth,” Boglis said.
