Demand for business loans starts to slow down

The demand for business loans across Australia has slowed down, as companies are taking a more cautious approach to their finances.

New figures compiled by Veda have indicated that corporate credit applications grew by just 4.5 per cent in the year to June, which was way down on the 8.8 per cent increase in the first three months of the year.

It is crucial that firms – especially smaller ones – have access to funding from banks and lenders if they hope to expand, but a lot of organisations are wary about amassing too much debt.

This is especially the case while the global economy is in such a precarious position.

Veda's general manager for commercial credit Moses Samaha believes the downturn in business confidence could affect the nation's gross domestic product (GDP) figures.

"The latest data suggests a softening in the pace of real GDP growth after a very strong March quarter," he said.

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