New research released by the ABS has found that the economy is still struggling, with lending for small business dwindling.
The ABS reported a small rise in lending for housing, which was dominated by first-home buyers, but lending to business fell by 14.7 percent to a 42-month low in February.
The figures show that businesses are still finding it difficult to gain access to credit with the NAB’s monthly business survey echoing the above sentiments with 26 percent of respondents reporting tougher availability of credit in February compared with January.
The NAB also reported that the proportion of firms not wanting to increase their borrowing fell in March for the second month in a row.
Small business industry groups have urged the banks to pass on the RBA’s latest interest rate cut to small business borrowers in order to reduce the financial strain they are currently under.
COSBOA chief executive Jaye Radisich said home loan rates had been reduced in the past 12 months, but there hasn’t been any “flow-on” for small businesses.
“Most small businesses don’t have the fat in their budgets that major corporations do. So every time there’s a change in interest rates or if their access to credit is denied or there’s other regulatory factors which affect them then they have to make serious decisions in terms of whether there has to be cutbacks in their own business.”
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