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New data from the Equifax Monthly Business Pulse Insights revealed overall commercial credit demand grew 3.8 per cent in July compared to the same month last year.
The rise was driven by a jump in business loan demand, while asset finance recorded a smaller increase of 2.7 per cent over the year.
Equifax reported 1,362 insolvencies across Australia in July, up 10 per cent on July 2024, with construction businesses bearing the heaviest burden.
The construction industry recorded 341 insolvencies in July, while accommodation and food services followed with 226 insolvencies, and the retail sector reported 91 failures.
NSW had the highest number of insolvencies with 488, followed by Victoria with 410, and Queensland with 282, according to the data.
Brad Walters, general manager of commercial at Equifax, said the figures reflected the mixed pressures facing businesses across the economy.
“Understanding the trends impacting businesses, including the appetite for and use of credit, is particularly important given the renewed focus from Government and industry bodies on boosting Australia’s productivity,” Walters said.
“In the face of ongoing market uncertainty, economic pressures and continued growth in insolvencies, we can see that many businesses are reaching out for credit – often to maintain operations or invest in core offerings, rather than investing in productivity enhancing measures such as technology, training or hiring.
“On a positive note, the average days beyond terms are decreasing, indicating business cash flow for invoice payments is slowly improving – although there are still outliers, with Construction and Rental, Hiring & Real Estate Services paying back dues almost twice as late as the market average.”