The credit data for March is out and it shows a business economy moving in two very different directions
Why this matters: The March data offers a sector-by-sector read on where Australian businesses are financially right now.
The headline number from Equifax’s Business Market Pulse for March 2026 looks reasonable on the surface. Overall business credit demand rose 3.5% year on year, a positive sign after a flat February. But that number covers up a divide that matters considerably more for small business owners than the aggregate figure suggests.
Large businesses drove a 5.9% year on year increase in credit enquiries in March. SME demand moved in the opposite direction, falling 5.8% year on year. It is the same pattern Equifax has been tracking for several months, a business economy where larger, better-capitalised companies are actively accessing credit to grow, while smaller operators are pulling back, managing costs, and in some cases struggling to stay on top of their tax obligations.
The two-speed business economy
Brad Walters, General Manager of Commercial at Equifax, has been watching the divergence between large and small business credit behaviour build over recent months. The March data reinforces it. When SME credit demand falls at the same time as large business demand rises, it typically signals one of two things: either smaller businesses are more cautious about taking on debt in an uncertain environment, or they are finding it harder to access credit on acceptable terms. In March, both factors appear to be at work.
The broader context makes the SME pullback understandable. Fuel costs have surged following the conflict in the Middle East, supply chain disruptions are feeding through into input costs across multiple sectors, and the ATO is actively pursuing overdue tax debt. New ATO tax debt disclosures rose 37.8% year on year in March, a sharp acceleration that reflects both the ATO’s ongoing enforcement posture and the financial pressure accumulating across the business sector. Company insolvencies remain at elevated levels, and business-related personal insolvencies are continuing to rise.
Logistics and the fuel pressure signal
The logistics sector data in March is among the most telling in the entire report. Overall credit demand in logistics fell 4.2% year on year, and business loan demand dropped sharply by 11.6% year on year, with regional declines across most states. But within that picture of retreating demand, one number stands out: trade credit in the logistics sector surged 16% year on year, the highest trade credit growth of any major sector in the data.
The pattern suggests logistics operators are not borrowing to grow. They are using credit lines to buffer rising fuel costs and absorb supply chain shocks, keeping operations running while putting new investment on hold. Asset finance continued three consecutive months of demand growth in the sector, up 4.4% year on year, which Equifax notes may reflect logistics businesses looking toward electric vehicles as a way to reduce exposure to diesel prices over time.
The ATO data reinforces how acute the pressure is in this sector specifically. New ATO tax debt disclosures in the logistics sector rose 97.7% year on year in March, nearly doubling in a single month. For small business owners running freight, transport, or distribution operations, the combination of surging fuel costs, falling revenue from reduced business loan activity, and a sharp increase in tax debt exposure paints a difficult picture heading into the June quarter.
Construction and the Queensland outlier
The one genuinely positive story in the March data is Queensland construction. Overall construction credit demand rose 2.4% year on year nationally, driven by a 4.5% increase in business loans. But in Queensland specifically, construction business loans surged 24% year on year, a trend that is holding across both large and small businesses in the state. Asset finance in Queensland construction also rose 12% year on year.
Equifax attributes this directly to infrastructure projects underway for the Brisbane 2032 Olympic and Paralympic Games. The pipeline of work is generating sustained credit demand from construction businesses across the state, and the data has now shown this trend holding firm for several consecutive months. For SME owners in construction, trades, or supply businesses operating in Queensland, the conditions are meaningfully different from the rest of the country.
Nationally, construction trade credit fell marginally by 0.2% year on year in March, though Equifax notes that trade credit enquiry volumes from the construction sector improved compared to February as borrowers sought more credit to manage elevated fuel costs, a similar dynamic to logistics.
Elsewhere in the sector data, retail overall credit demand dropped 5.2% year on year in March, with business loans down 7.7% and trade credit falling 8.1%, though asset finance continued to grow at 6.6% year on year. Hospitality saw overall demand fall marginally by 0.7% year on year, with Victorian hospitality businesses bucking the national trend, recording a 19% year on year increase in overall enquiries. Professional services overall demand fell 2.9% year on year, with trade credit down 16.1%, though Queensland again showed a pocket of relative resilience at 0.9% year on year growth.
ATO debt and insolvency pressure
The ATO tax debt disclosure numbers in March are a signal that deserves attention from any SME owner carrying overdue tax obligations. The 37.8% year on year rise in new disclosures nationally, and the near-doubling in logistics specifically, reflects an ATO that is continuing to actively pursue outstanding debt even as broader economic conditions tighten.
The ATO has had more than 30,000 businesses with active tax defaults in recent months, and the Small Business Debt Helpline reported assisting with more than $429 million in ATO-related debts in the 12 months to December 2025, with the median ATO debt sitting at $70,000. For businesses in that position, the June quarter brings additional pressure with Payday Super obligations arriving on 1 July 2026, adding another compliance requirement to an already stretched environment.
For SME owners reading the March Equifax data, the practical message is fairly direct. If your business is in logistics, retail, or professional services, the credit environment is tightening and the cost pressures are real. If you are in construction in Queensland, the conditions are genuinely strong and likely to remain so through the Olympics infrastructure build. And if you are carrying ATO debt in any sector, the March data suggests the window for proactive resolution, before enforcement action accelerates, is not getting wider.
