Small-to-medium enterprises (SMEs) are leaning on credit to fund day-to-day operations, with business loan enquiries from smaller firms up 14% year on year in September 2026, according to Equifax’s latest Business Market Pulse.
Large businesses moved the other way, with loan enquiries down 11.4% on September 2025. Across all business sizes, business loan enquiries rose 10.1%, broadly in line with August’s 11.3% gain, on a trading-day-adjusted basis.
The shift came in the same month the Reserve Bank (RBA) lifted the cash rate to 4.6%, with the central bank noting that growth in business debt remained strong.
Brad Walters (pictured), general manager of commercial at Equifax, said the drop among larger firms did not necessarily signal a sudden loss of borrowing appetite. He pointed to elevated activity in August and suggested some funders may be tightening their commercial lending amid market uncertainty. Smaller operators, meanwhile, are using credit to cover day-to-day costs.
The cash-flow strain is also showing up in payment behaviour. August payment data, the latest available, showed 90.2% of invoices were paid on time, unchanged from July. However, the share of invoices between one and 30 days overdue rose to 7.9% from 6%.
Walters said businesses appeared to be “starting to stretch supplier payment terms by a week or two” to preserve cash. He flagged early arrears as a measure to watch heading into the final quarter.
The production sector, which includes construction, manufacturing, mining, and transport, recorded a 10.8% lift in business loan enquiries. In construction, SME business loan enquiries rose 13.6% while equipment finance applications were almost flat, down 1.6%.
Facing material costs and trade payment delays, smaller builders, Walters said, “are securing cash lines likely to help keep current projects moving”.
Large transport and logistics businesses bucked the broader large-business decline, lifting loan enquiries by 33.2% even as their asset finance applications fell 16.6%, a pattern Walters linked to fuel, wage, and supply-chain pressures.
Those cost pressures are weighing on sentiment more broadly. The NAB Monthly Business Survey for September found business confidence fell four points to minus 13 index points, with the bank pointing to higher interest rates, global uncertainty, and elevated fuel and diesel costs.
Asset finance applications remain below last year’s levels, but the gap has closed sharply. They were down 3.2% year on year in September, compared with a 12.7% fall in August, as operators who had held off on new plant and technology began to reconsider.
Investment intentions remain weak, however. Only 26.9% of businesses surveyed for Roy Morgan’s September 2026 Business Confidence report said the next 12 months would be a good time to invest in growing the business, while 49% said it would be a bad time.
In Walters’ view, firms were not yet back in expansion mode, but “the freeze looks to be thawing”.
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