The eastern states emerged as the primary drivers of this positive trend. Queensland led the charge with a 5% annual rise in business loan applications, followed closely by New South Wales with a 4% increase. South Australia and Western Australia also contributed to the upward trajectory, each recording a 5% rise in applications. This regional growth underscores the diverse economic activities and opportunities present across Australia's states.
Brad Walters, General Manager Commercial at Equifax, highlighted that the higher demand for commercial credit is supported by greater market confidence. This confidence is reflected by an influx of high credit quality entities whose average credit scores have been steadily rising. The presence of financially robust businesses seeking credit suggests a proactive approach to leveraging growth opportunities in the current economic climate.
The National Australia Bank's (NAB) latest survey corroborates these findings, showing firmer trading conditions, improved profitability, and business confidence levels sitting above long-run averages. Such indicators point to a resilient business sector poised for expansion and investment.
However, the economic outlook remains nuanced. While the labour market demonstrates resilience, leading to expectations of sustained interest rates by the Reserve Bank of Australia (RBA), other sectors exhibit signs of cooling. Retail, construction, and small-business credit conditions have shown uneven softening, prompting lenders to maintain a cautious stance as they approach 2026.
For small and medium-sized enterprises (SMEs), this environment presents both opportunities and challenges. The increased availability of commercial credit can facilitate business expansion, equipment upgrades, and operational enhancements. Yet, SMEs must navigate the complexities of varying economic signals and ensure that their borrowing strategies align with their financial health and market conditions.
In conclusion, the rise in commercial credit demand in Q3 2025 reflects a positive shift in business sentiment and confidence within Australia's commercial sector. As businesses continue to adapt to the evolving economic landscape, strategic financial planning and prudent borrowing will be essential in capitalising on emerging opportunities while mitigating potential risks.
