Business credit demand plateaus but insolvency pressures remain high, according to Equifax’s latest Business Market Pulse.
Overall business credit applications in February rose just 0.9% year-on-year, leaving year-to-date demand flat compared with the same period in 2025.
Brad Walters (pictured), general manager of commercial at Equifax, said the latest figures show momentum has clearly shifted.
“The Equifax Business Market Pulse for February 2026 indicates a softening of the growth trajectory that characterised the latter half of last year,” Walters said. “We are starting to see a shift from strong momentum to a more subdued environment, where overall business credit demand is essentially flatlining year-to-date.”
The findings come amidst a broader backdrop of elevated global risks, with Australia’s latest Financial Stability Review pointing to higher macro-financial risks but a still-resilient local system. RBA has warned that “Global financial stability risks are elevated in a rapidly evolving international environment.”
The Equifax data points to a market where borrowing capacity and serviceability will depend increasingly on sector and state exposure. At the same time, housing credit growth remains solid, and regulators are tightening guardrails around high debt-to-income and high loan-to-valuation residential lending.
Behind the modest headline growth, business loan demand rose 3.5% and asset finance 2.3% over the year to February.
Hospitality led major industries, with overall business credit demand up 8%, driven by a double‑digit rise in business loan enquiries as operators look to manage rising costs and stabilise cash flow.
“The hospitality sector’s 13.7% jump in business loans, paired with a move away from asset finance (-2% YoY), may indicate that these operators are prioritising cash flow and operational management over capital expansion,” Walters said.
Construction credit demand increased 2.4%, underpinned by strong asset finance growth, especially in Queensland where demand was up more than 20%, reflecting major infrastructure and Brisbane 2032 activity.
Retail trade and logistics also recorded solid increases across business loans and asset finance, suggesting ongoing investment even as conditions become more challenging.
Equifax’s insolvency data highlights emerging fault lines that brokers and lenders will need to monitor in assessing commercial mortgage rates and credit appetite.
“We are currently observing a tale of two insolvencies,” Walters said.
Company insolvencies in February were up around 3% year-on-year and remain at elevated peak levels, while national business insolvency volumes jumped 16% in January compared with a year earlier. Business‑related personal insolvencies are 19% higher than at the same time last year, rising more quickly than company failures, particularly in the eastern states.
Insolvency pressures are most pronounced in Queensland and New South Wales, while Western Australia has seen a notable fall in company insolvencies.
With tax debt defaults increasing and insolvency volumes still elevated, brokers arranging commercial loans or refinancing for SME and property investor clients may need to place greater emphasis on industry, geography, and cash‑flow resilience when structuring deals.
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