The test is arbitrary in its treatment of commercial borrowers. Additionally, without a monetary ceiling it would regulate many commercial credit contracts. However, matters of definition would be complex. Because lenders would likely seek to always contract out when lending to commercial borrowers, it would have little, if any, advantage over blanket exclusion of commercial credit. The test, and variations of it, are coming into more widespread use internationally.
Australian evidence shows the test is workable for lenders and borrowers.
Advantages include its flexibility and consistency with market practice. However, it may result in uncertainty in limited situations. On balance, it appears to offer a favourable approach.