Business credit demand bounces off first quarter lows
July 29, 2009
Business credit applications for the April to June quarter of 2009, fell by 2.1%, Veda Advantage’s Business Credit Demand Index has revealed. Although credit applications were still down, this was a steady improvement from the January to March quarter, when credit demand fell by 8.3% compared to the same quarter in 2008.
Business applications for credit rose more than 22% in the June quarter compared to the March quarter of ‘09, with the month of June importantly seeing the first positive credit growth since December 2007.
Veda Advantage General Manager, Russell Evans, said the analysis was a sign business credit demand is increasing, albeit slowly, as businesses begin to re-gain confidence in the economy.
“Our credit bureau data indicates some healthy signs suggesting Australian businesses are starting to regain confidence and are now considering taking on a little more debt,” he advised. “The month of June recorded the first positive year-on-year increase for 18 months with a 2.4% increase in credit demand.”
“We also saw credit applications were most notably driven by car financing. The recent Government car rebate has helped spike the demand for new auto financing, a 12% increase from this time last year.”
“We will be watching to see if credit applications pick up throughout the start of the 2009/10 financial year, and hopefully the month of June will set the tone for the start of the next financial year,” Mr Evans said.
Business credit applications for the July 1 2008 to June 30 2009 financial year ended down 6.6% compared to the previous 2007/2008 financial year.