Commercial Credit Demand Rises Driven by Easing Monetary Policy - Insolvency Rate Drops Despite Challenges in Some Sectors

Equifax Quarterly Commercial Insights: September 2025

• Overall commercial credit demand increased +3.0% (vs Q3 2024)
• Business loan applications grew +5.0% (vs Q3 2024)
• Insolvencies declined nationally by -2.1% (vs Q3 2024)
• Asset finance applications increased by +0.7% (vs Q3 2024)
• Trade credit applications decreased by -3.7% (vs Q3 2024)

Easing monetary policy and increasingly positive business conditions are spurring growth in commercial credit demand, which improved by 3% in Q3 2025 according to the latest Equifax Quarterly Commercial Insights - September 2025.

This national overall growth was specifically led by an increase in business loans across the Eastern Seaboard, with Queensland leading the way with a 5% increase in overall demand change year-on-year. In tandem, NSW (4%), SA (2%), and WA (5%) also experienced upticks in commercial credit demand. 

Brad Walters, General Manager, Commercial at Equifax, said: “The higher demand for commercial credit Equifax is seeing across the board is supported by greater market confidence, reflected by an influx of high credit quality entities whose average credit scores have been steadily rising. 

Our data also demonstrates that larger entities had greater credit appetites in the quarter, with a 4.2% increase in demand compared to that of their Small and Medium-sized Enterprise (SME) counterparts. Positively SME demand increased 2.7%, helping reduce the credit demand disparity with larger organisations.”

Insolvencies Record First Quarterly Year-on-Year Decline, but Some Sectors Continue to Struggle

Positively, commercial insolvency volumes have recorded their first quarterly year-on-year decline (-2.1%), when compared to the same time last year (Q3 2024). Significantly, this is also the first quarterly year-on-year decline observed since 2021.

Despite the construction sector continuing to lead the market in insolvencies, with a total of 2630 insolvencies reported over the past three quarters (January to September 2025), there have been moderate signs of improvement for the sector. 

“Although insolvencies continue to be a challenge for the construction sector, our data also reflects that the total number of insolvencies has reduced by 4.1% since September 2024,  a hopeful sign of a sector experiencing slow recovery,” said Mr Walters.

While arts & recreation (-26%), ICT (-23%), wholesale trade (-25%), hospitality (-19%), and manufacturing (-11%) have achieved an overall improvement (decrease) in the number of insolvencies, sectors such as agriculture (+61%), mining (+40%), public admin & safety (+36%), transport, postal & warehousing (+34%), financial & insurance services (+33%) and retail (+3.9%) continued to struggle. 

“Following renewed upward pressure on inflation in August, we saw retail credit demand stabilise, remaining flat against last year. 

However, unlike other industries we have observed, we have seen insolvency levels in sectors such as agriculture, mining and retail for Q3 2025 increase from the same quarter last year,” said Mr Walters.

State-by-State Analysis Shows SME Strength in QLD, WA and SA

Equifax data reveals clear signs of relief nationally, however, state-by-state data shows both growth and contractions.

SMEs in Queensland, Western Australia, and South Australia all showed early signs of recovery in Q3 2025, each recording a strong increase in credit demand of at least +5.2%. These regional upticks suggest that easing monetary policy is also at play here, providing some relief to businesses that have faced significant challenges. 

The data also highlights a clear geographical lag, with Victoria's SME credit demand continuing to contract, sitting at -1% for the quarter. However, this is an improved position from Q2 2025,  in which Victorian SME credit demand was -3% (Q2 2025 vs Q2 2024). 

Businesses showed further signs of relief with Equifax data revealing shorter average payment delays with the nation-wide Days Beyond Terms (DBT) rate was better by 0.3 days compared to Q3 2024. This improvement was most visible in Queensland and Western Australia, aligning with their stronger demand growth, where businesses are now paying nearly one day earlier than they were last year.

“While this indicator of growing financial relief is positive to see, it is not uniform across all states. NSW businesses, for example, saw payment delays remain stubbornly high, contrasting with most other states where average trade payment days have been consistently decreasing for six quarters,” said Mr Walters. 

Overall Credit Demand Change, 2025 Q3

Source: Equifax

Demand Change by Credit Type, 2025 Q2

Source:Equifax

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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.

DISCLAIMER
Purpose of Equifax media releases:
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.