Interest in credit on the increase
BUSINESSES are taking advantage of interest rate cuts and seeking out fresh credit, particularly in the asset finance sector where inquiries reached the best l e v e l since the global financial crisis hit.
Commercial data provider Veda says its business credit demand index rose 6.8 per cent over the year to the end of September, after a 9.5 per cent lift in business loans, a 9.2 per cent increase in asset finance and 3 per cent growth in trade credit.
Overall growth in asset finance inquiries was the highest for almost three years.
But IT remained below its pre-GFC peak.
While businesses in the mining states of Western Australia and Queensland continued to exhibit the strongest demand for credit, demand also perked up in other states.
‘‘ Lower interest rates have no doubt already helped to support an improved rate of growth in business credit inquiries in the non- mining states of late,’’ Veda general manager of commercial risk Moses Samaha said yesterday.
A breakdown of Veda’s data showed business loan applications in the country’s two largest states by population — NSW and Victoria — jumped up by 10 per cent and 7.8 per cent respectively in the September quarter.
In the Northern Territory, there was a 48.7 per cent surge in loan demand in the quarter, coinciding with the go ahead this year of the Ichthys LNG Project.
The Reserve Bank of Australia has cut the cash rate by 150 basis points since November last year.