Australia’s business credit market is starting to lose momentum, with new data showing demand is no longer growing at the pace seen late last year - even as financial pressure on businesses continues to build.
According to Equifax, overall business credit demand rose by just 0.9% year-on-year in February. Year-to-date figures are flat compared with the same period in 2025, signalling a shift away from the stronger expansion recorded in late 2025.
Of interest to insurers is that slowdown is happening alongside elevated insolvency levels. Company insolvencies rose 3% year-on-year in February and remain elevated, with increases in Queensland and New South Wales partly offset by declines in Western Australia and Victoria. Business-related personal insolvencies rose faster, up 19% year-on-year in January, while overall business insolvency volumes increased 16% over the same period.
Victoria saw a 31% jump in business insolvencies in January compared with a year earlier. In Queensland, company insolvencies rose 7% in February, which is driven by higher activity in professional services and hospitality.
Across industries, demand was mixed. Hospitality recorded the strongest growth, with overall credit demand up 8%. This was mainly driven by a 13.7% rise in business loan enquiries, suggesting businesses are focusing more on managing day-to-day costs.
Logistics followed with a 7% increase in demand, supported by growth in both asset finance and business loans. Retail also grew by 4.8%, with gains across different types of credit.
Construction saw a smaller increase of 2.4%. Asset finance was the main driver, especially in Queensland where demand jumped 21.5%, linked to infrastructure projects for the Brisbane 2032 Olympic and Paralympic Games. However, trade credit in the sector declined slightly.
Professional services posted more modest growth, with overall demand rising 1.8%. That was driven mainly by business loans, which increased 4.9%, while asset finance growth was limited to 0.9%.
Other indicators also pointed to continuing financial strain. New tax debt default loadings across the market rose 9.1% year-on-year in February. In construction, the increase was steeper at 11.4%, exceeding the broader market trend.
