Australia's business credit market split further along size lines in June, according to the latest Equifax Business Market Pulse.
Large services businesses lifted business loan enquiries by 11.8% year-on-year and asset finance by 17.1%, while their SME counterparts moved in the opposite direction, with business loans down 6.1% and asset finance down 13.7% over the same period.
Brad Walters (pictured), Equifax's general manager of commercial, said the divide has become a defining feature of the current credit environment.
"Looking beneath the surface of the services and production sectors, the Equifax June Business Market Pulse reveals a continuing multi-speed economy,” Walters said. “Across both sectors, large corporate entities continue to leverage their scale to secure capital and maintain growth, whereas small-to-medium enterprises appear to be in capital defense mode – scaling back loan enquiries and pausing equipment upgrades to preserve working capital."
The pullback was most pronounced in construction, where asset finance for equipment has now turned negative at -4.4% year-on-year, having already softened from a 9.2% rise in December to -0.8% in May. Smaller building firms are driving the decline, with SME construction asset finance down 8.2% over the year.
Walters linked the trend to weakening confidence among smaller operators.
"Construction equipment acquisitions continue to unwind – softening from +9.2% YoY in late 2025 down to -4.4% YoY 6-months later in June 2026, led by an -8.2% YoY drop among SMEs," he said.
The Reserve Bank's March 2026 Financial Stability Review found insolvencies had stabilised at an economy-wide level, though it flagged construction and hospitality as still elevated. The pattern isn't confined to construction, either — a separate report found SME enquiries across sectors shifting toward cash-flow buffers rather than expansion finance, driven by rising ATO tax debt pressure.
Not every sector followed the same pattern. Large Queensland services firms increased business loan enquiries by 20.2% year-on-year, even as local SMEs recorded a 3.3% decline, underlining the strength of corporate demand in that state.
Transport and logistics operators also diverged from other sectors, favouring equipment upgrades over cash borrowing, with large firms increasing asset finance by 8.9% and SMEs by 1.7%, while business loan demand fell for both.
Walters said the trend looks set to persist.
"As trading conditions persist through mid-2026, the gap between corporate expansion and SME conservatism remains a central theme in the business credit market," he said.
Separately, NAB's June Monthly Business Survey recorded a third straight monthly rise in business confidence, though conditions remain below their long-run average and cost pressures continue to weigh on borrowing appetite.
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