A record 61% of Australian small and medium-sized enterprises (SMEs) planning to invest will turn to non-bank lenders to fund it, as the sector splits sharply between businesses expecting strong growth and those bracing for steep falls.
The finding comes from the September 2026 edition of ScotPac’s SME Growth Index, based on interviews with 727 SMEs with annual revenues of $1 million to $20 million, conducted by East & Partners and completed in July.
About three in five SMEs plan to invest in their business over the next six months. Among them, the share intending to use non-bank lending has climbed from 19% in 2019 to 61%. The share planning to use bank lending held at 31%, well below its 2023 peak of 48%.
More than half (56%) of SMEs expect revenue to rise over the next six months, forecasting an average increase of 12.7%, the strongest in the index’s history. At the other end, 37% expect revenue to fall by an average of 15.1%, also a record. Just 7.4% expect no change.
The report said the divide calls for different approaches from brokers: “A two-speed economy requires two distinct conversations.”
ScotPac chief executive Clare Morgan (pictured) made a similar point in the report’s executive summary.
“For brokers and advisers, the widening gap between SME growth or decline creates an opportunity to go beyond the transaction,” she wrote.
The introduction of Payday Super on 1 July 2026, which requires employer super contributions to be received within seven business days of each pay run rather than quarterly, is adding pressure. Only 26% of SMEs said they were fully prepared or expected no material cash flow impact. Exposure is highest among smaller businesses, 83% of which expect a negative hit, compared with 64% of larger SMEs.
More than a third (37%) intend to seek an external funding facility to manage the transition. Payroll funding (16%) and invoice finance (10%) are the most popular options. The change also affects serviceability, with Lend analysis suggesting Payday Super could reduce SME borrowing capacity by as much as 15%.
Tax and compliance costs have overtaken access to credit as SMEs’ leading cash flow pressure, nominated by 20% of businesses. That pressure is building on the enforcement side too: small business collectable tax debt reached $35.9 billion in 2024–25, according to the Australian National Audit Office, and its findings are pushing the Australian Taxation Office (ATO) to speed up debt recovery.
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