Business credit demand in Australia has surged to a three-year high, according to Equifax’s latest Business Market Pulse report for the December quarter. The report indicates a 2.3 per cent year-on-year increase in overall business credit demand, primarily fuelled by larger companies. Some sectors, such as hospitality, experienced growth as high as 20 per cent. Equifax is a global data, analytics, and technology company. It provides insights that help businesses make informed decisions.
Business loan demand saw a 4.1 per cent rise, and credit scores reached their highest point in three years. However, trade credit demand experienced a 4.9 per cent decrease compared to the fourth quarter of 2024. Large businesses demonstrated significant credit demand growth, particularly in hospitality, where it reached 19.4 per cent. In contrast, SME demand increased by 4.5 per cent but remains 9 per cent below the levels seen in the first quarter of 2022.
Within the hospitality sector, large operators increased trade credit demand by 19.4 per cent and business loans by 9.1 per cent, coinciding with a 9 per cent year-on-year decline in sector insolvencies. The construction industry also displayed a similar trend, with large firms increasing trade credit demand by 6.6 per cent, while small builders reduced overall borrowing by 0.7 per cent.
Retail mirrored this divergence, with large retailers showing a 7.9 per cent increase in demand, including a 25 per cent surge in business loan enquiries in New South Wales. Conversely, SME demand in the retail sector remained largely unchanged, indicating a continued disparity in borrowing behaviour between large and small businesses.
