Commercial lending appetite strengthened in the September quarter, with new Equifax data showing a 3% annual rise in overall commercial credit demand, led by business loan growth across the eastern states.
However, the outlook remains mixed. Labour-market resilience is pushing expectations of RBA rate cuts further out, even as other parts of the economy begin to cool. At the same time, uneven softening across retail, construction, and small-business credit conditions highlights why many lenders remain cautious heading into 2026.
Business loan applications rose 5% year-on-year, helping lift total commercial credit demand nationwide.
Queensland led with a 5% annual rise, followed by NSW (+4%), SA (+2%) and WA (+5%).
Brad Walters (pictured), general manager commercial at Equifax, said stronger credit profiles are driving part of the uplift.
“The higher demand for commercial credit Equifax is seeing across the board is supported by greater market confidence, reflected by an influx of high credit quality entities whose average credit scores have been steadily rising,” Walters said.
Larger corporates also showed rising credit appetite, up 4.2% year-on-year, while SMEs recorded a 2.7% lift.
National insolvency volumes dropped 2.1% year-on-year — the first quarterly decline since 2021.
Construction continues to account for the highest number of failures, with 2,630 insolvencies lodged between January and September 2025, though Walters noted signs of stabilisation.
“The total number of insolvencies has reduced by 4.1% since September 2024, a hopeful sign of a sector experiencing slow recovery.”
Several industries recorded significant improvements, including:
However, pressures remain in:
Walters said renewed inflation pressure in August contributed to flat retail credit demand, contrasting with improvements elsewhere.
SMEs showed encouraging signs of improvement in several regions:
Average days beyond terms (DBT) also improved nationally, falling 0.3 days from a year earlier, with the strongest gains in Queensland and WA.
"While this indicator of growing financial relief is positive to see, it is not uniform across all states,” Walters said.
The Equifax leader noted that NSW businesses have seen payment delays remain stubbornly high compared to other states.
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