Levels of business credit demand are on the increase thanks to improved economic conditions and renewed business confidence, new data suggests.
The Quarterly Business Credit Demand Index by credit information and analysis specialists Equifax found that levels of overall business credit applications rose by 2.7% in the June quarter 2017 versus the same period a year before.
Released on Saturday (29 July), the report also found that asset finance applications and trade credit applications increased by 6.5% and 0.4% respectively year on year.
Business loan applications recorded moderate growth of 1.9% while commercial mortgage applications showed strong growth of 23.2% despite easing slightly in the June quarter.
This growth signified positive outlook for businesses, consistent with a number of external indicators, said Neil Shilbury, Equifax general manager of commercial and property products.
“The uptick in business credit demand seen in the June Index suggests much of the pain from falling mining investment is passing, helped along by improved conditions in China which have boosted the Australian economy.
“Over the past several months, we have seen strong company profits, low interest rates, and solid levels of business confidence nationally. In this context, the pick-up in business credit growth seen in the most recent Index is consistent with the better business conditions that have emerged in the first half of 2017.”
Growth in business credit applications picked up in both mining and non-mining regions during the June quarter this year. However, trends were stronger in non-mining states (+3.7%) than in the mining states of Queensland, Western Australia and the Northern Territory (+0.5%).
||Overall business credit
All percentages in the above table reflect growth in applications between the June quarter 2017 and the same time period in the year before.
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