A non-bank lender is a financier that doesn't hold an Authorised Deposit-Taking Institution (ADI) licence under the Banking Act 1959. Without the ADI status, the lender can't take retail deposits and isn't subject to APRA's prudential capital rules.
Non-bank lenders fund their loan books from wholesale capital: private credit funds, warehouse facilities, family-office mandates, institutional investors, and (in the consumer space) RMBS issuance. The funding structure shapes the products, non-banks typically don't compete on long-term P&I residential mortgages where the deposit-funded majors are structurally cheaper, but compete strongly on bridging, development, commercial, and self-employed lending where credit policy flexibility matters more than headline rate.
The Australian non-bank segment includes large, established lenders (Pepper, Liberty, La Trobe) and a long tail of specialist private credit firms.
Financial services licensing and consumer credit licensing are different regimes. Which requirements apply depends on the entity, its activities, the borrower and the purpose of the credit. An Australian financial services licence does not guarantee an investment and is not a substitute for APRA prudential supervision.