Low-risk applications are able to use a simple area-based indicator of the land affected whereas more rigorous analysis is required for projects with a larger environmental impact. Differentiating regulatory compliance in this way also recognises that regulatory costs can disproportionately affect small and medium-sized businesses where the relative impact of costs of complying with regulation can be higher than for larger businesses. The regulatory process differs for developers according to the assessed risk of the proposed biodiversity loss at the development site. Risk is defined by the size of the proposed clearing (extent risk) and the likelihood that it will have an impact on the persistence of rare or threatened species (location risk).