Commercial borrowing dropped by more than 10 percent late last year as the credit crunch began to eat into lending funds. Totally lending for the year 2008 dropped 30.7 percent according to the Australian Bureau of Statistics.
However, the proportion of borrowing from pre-approved lines of credit, the business version of a credit card, rose 62.7 percent.
Tighter lending standards and lower demand for credit has meant businesses have had to put capital spending on hold and cut costs – including cutting or limiting jobs.
Businesses exposed to the global downturn, such as exporters in the resources sector, would suffer the most, said senior economist at the ANZ Bank, Katie Dean. “This enforcement, particularly the commodities outlook, will probably lead to the further deferral or cancellation of some projects, and that would weigh on lending for some time.”