Equifax Quarterly Commercial Insights: June 2025
- Overall business credit applications increased by +5.2% (vs June quarter 2024)
- Business loan applications grew +6.0% (vs June quarter 2024)
- Asset finance applications increased by +1.4% (vs June quarter 2024)
- Trade credit applications were up +0.9% (vs June quarter 2024)
SYDNEY – August 2025 – Credit shopping among higher-risk borrowers has seen a marked uptick in recent months, with applicants approaching multiple lenders searching for credit options to help bolster their business operations.
According to the Equifax Quarterly Commercial Insights - June 2025, overall demand for commercial credit grew +5.2% in Q2 2025, primarily fueled by a +6.0% uplift in business loans. This indicates that many businesses, facing economic pressures, are reaching out for credit either to maintain operations or invest in core offerings.
Underpinning this increase in demand is a notable increase in credit shopping behaviour among lower-score borrowers, spurred on by moderating inflation and interest rate cuts. In February 2025, 39% of high risk enquiries were credit shopping, which jumped to 49% in March 2025.
Brad Walters, General Manager, Commercial at Equifax, said: “The increase in credit shopping behaviour is a worrying trend, as it can be an indicator of stress and suggests that a business may be struggling to gain access to credit or be unable to secure favourable terms from lenders.
“This behaviour is particularly apparent in key industries: in Q2 2025, more than half of enquiries from higher-risk entities in construction (51%) and professional services (51%) were shopping around, while the number of higher-risk hospitality businesses shopping for credit has increased year-on-year to 39%.
“Additionally, small and medium sized entities (SMEs) are more likely to shop around for credit when compared to their larger counterparts. One in two enquiries from higher-risk SMEs were credit shopping in Q2, while large businesses are 10% less likely to credit shop than 12 months ago.”
Business growth subdued as insolvencies continue to rise
Equifax data also shows that economic uncertainty has contributed to subdued business growth, with fewer new businesses entering the market compared to last year, and more businesses exiting. Year-on-year in FY25, 9% fewer entities were created across the entire market. On the other side of the equation, company exits increased 12%.
The professional services industry was the most impacted, experiencing a -42% decrease in the number of new entries in the past 12 months. The construction (-13%) and hospitality (-20%) industries also saw significantly lower entries in FY25, while exits in the construction sector were 3% higher than the previous year.
Meanwhile, insolvencies soared to a five-year high, up 21% in H1 2025. Construction (+12.4%) and hospitality (+27.8) continue to be hard hit by insolvencies, with higher costs and the ongoing impact of cost-of-living pressures on consumers impacting business survival rates.
“Together, the subdued growth and increasing risk profile of Australian businesses across key segments could hinder efforts to strengthen economic growth and improve productivity,” Mr Walters said.
IMAGE 1: Overall Credit Demand Change, 2025 Q2
IMAGE 2: Demand Change by Credit Type, 2025 Q2
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NOTE TO EDITORS
The Equifax Quarterly Commercial Insights (formerly Business Credit Demand Index) measures the volume of credit applications for business loans, asset finance and trade credit that go through the Equifax Commercial Bureau by financial services credit providers in Australia. Based on this, it is considered to be a good measure of intentions to acquire credit by businesses. This differs from other market measures published by the RBA/ABS, which measure new and cumulative dollar amounts that are actually approved by financial institutions.
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The information in this release does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.
