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The second quarter of 2025 recorded a 20 per cent surge in commercial finance loan settlements.
Despite this rise, there was only a 1.9 per cent yearly increase in inquiry volumes.
According to Valiant Finance co-founder and CEO Alex Molloy, this means the appetite from lenders is what has shifted the figures, rather than increased borrower demand.
He said non-banks are helping lead this shift in appetite. There are a variety of factors at play, such as recent rate cuts and improving business sentiment, helping get more SME loans funded.
Lenders are more open to funding growth, allowing more deals to get across the line.
Construction continues to dominate in the portion of funded loans and loan inquiries.
Healthcare and social assistance witnessed a 40 per cent increase in funded loans over the quarter.
Agriculture saw significant increases too, with settlements up 50 per cent, in what was described as “renewed confidence”.
Professional services funding is up 20 per cent, attributed to a “reinvestment in core operations.”
Real estate, manufacturing, transport and logistics, and retail saw decreases in the number of funded loans. This could be indicative of challenges facing these industries.
When asked whether he believes commercial financing will continue to rise, Molloy said yes, but not across the board.
“We’re expecting continued demand for asset finance as businesses look to invest in productivity, whether that’s better equipment or new technology. Sectors like construction and healthcare are also expected to keep growing, driven by underlying demand,” he said.
“But in areas like hospitality, especially for less established businesses, access to finance remains tough. Lenders are still cautious there, and we’ll likely need to see clearer signs of recovery before that changes, something not helped by the RBA’s decision to hold rates steady.”
The increased appetite from lenders coincides with recent data from NAB, which revealed nearly 60 per cent of Aussie businesses plan to invest in the next 12 months.
Brokers have an opportunity to capitalise on this. There are more brokers than ever before operating in the commercial finance lending space, with 31.54 per cent of mortgage brokers also writing commercial loans.
MFAA CEO Anja Pannek said the greater diversification of brokers allows enhanced competition and choice and SME clients are provided with more options.
[Related: Brokers urged to become ‘strategic partner’ as businesses eye investment]
