Business demand for credit cards grows sharply

By Mozo ·

A growing number of Australian companies have been applying for credit cards, new figures have shown.

Economists have been voicing their concerns over the apparent lack of demand for business loans, which they believe can harm economic growth, as firms are unable to expand.

However, a new Veda report has shown that business credit inquiries increased by 8.8 per cent in the first quarter of the year, compared with the corresponding period in 2011.

Much of the extra demand, as expected, was driven by organisations in the booming mining states, with the Northern Territory being a particularly lucrative market for lenders.

Head of commercial risks at Veda Moses Samaha said that small and medium-sized enterprises (SMEs) across the nation have also been securing credit.

Unlike businesses in the mining industry, these SMEs have not been looking to expand, but have become reliant on credit for cash flow purposes, which Mr Samaha thinks is a concern.

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