Move to real-time superannuation payments could weigh on small business serviceability
Australian small and medium-sized enterprises (SMEs) could see their borrowing capacity reduced by as much as 15% when Payday Super rules take effect in mid-2026, according to analysis from SaaS platform Lend.
The changes are expected to alter how lenders view cash flow and serviceability, with implications for brokers arranging working capital and business-secured facilities for SME clients.
From July 1, 2026, employers will be required to pay the 12% superannuation guarantee at the same time as wages, rather than on a quarterly basis. For many businesses, this will remove a short-lived pool of unpaid super that has effectively operated as a liquidity cushion inside the business.
Bill Baker (pictured right), chief executive of Lend, said the shift would flow directly into lender assessments of SME cash flow.
“Under the quarterly system, unpaid super effectively sat inside the business as a short-term liquidity buffer,” he said. “That meant bank statements often showed higher average balances, stronger month-end positions, and more headroom in offset and redraw accounts. Lenders use all these inputs in their serviceability and risk models.”
As super moves to a “pay as you go” basis, Baker warned that brokers and lenders will need to recalibrate their assumptions about surplus cash. “Once super is paid alongside wages, whether weekly, fortnightly or monthly, that buffer disappears,” he said.
“Serviceability needs to be assessed on that new reality. We’re already seeing commercial brokers reassess SME cash flow under Payday Super assumptions to help their clients understand their post-reform borrowing position.”
Lend’s modelling focuses on a typical SME with average monthly turnover of $86,000 and wages accounting for about 60% of revenue. Under the existing quarterly arrangement, such a business may effectively hold one to two months’ worth of unpaid super liabilities in the business at any given time. Once Payday Super is in place, that buffer — estimated at around $10,000 in this example — will no longer appear in transaction accounts or offsets.
While the direct effect is roughly a 1% reduction in cash flow, the firm argues that the impact on borrowing power can be far more material when tested through lender serviceability metrics. “For businesses operating on profit margins of 5–10%, a 1% cash flow hit can absorb between 9% and 18% of surplus cash,” Baker said. “Depending on the lender’s model, that can translate into a 7–15% reduction in borrowing capacity.”
Baker suggested brokers engage SME owners early, noting that many view Payday Super as a payroll or compliance matter rather than a credit issue. Explaining how the new timing of super payments may alter surplus cash calculations, working capital limits and broader serviceability outcomes could help clients avoid surprises at approval stage.
The reforms may also prompt a shift in how working capital facilities are discussed with clients. Rather than being treated only as a response to financial stress, such facilities could be positioned as tools for managing timing gaps in cash flow and maintaining headroom in serviceability measures as the new super regime beds in.
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