Business loan applications fell by 5.2 per cent in the September quarter – the biggest drop in demand since 2021, credit bureau Equifax reported. The decline was driven by a fall in business loan applications, which were down 8.8 per cent compared with the same period last year. Trade credit applications were down 3.5 per cent. Asset finance demand bucked the trend, with applications up 5.2 per cent in the quarter, compared with the September quarter last year. Equifax general manager commercial and property services, Scott Mason, said: “Higher interest rates and overall market uncertainty has led to subdued credit and business loan demand this quarter.” Mason said other indicators of tough business conditions were the low level of net business formation and increasing insolvency rates. According to Equifax data, the 2022/23 financial year saw the lowest growth in the number of Australian businesses since 2019/20. Net growth in the number of businesses was just 0.8 per cent, with an entry rate of 15.8 per cent and exit rate of 15 per cent. There was net growth of 7 per cent in 2021/22. The construction and retail sectors were the hardest hit, with both recording net declines in business numbers. Business insolvency rates increased 11 per cent in the September, compared with the same month last year. The construction industry had the biggest share of insolvencies, at 31.5 per cent of all cases recorded.