5 Key Trends Shaping Business Lending in 2026

The Australian business lending market is shifting in ways that matter for anyone seeking finance this year. Economic conditions for SMEs have improved but remain subdued, and the lending environment is becoming more competitive and accessible. Here's what's actually happening and what it means for you.

1. Credit is getting cheaper and easier to access

Competition among lenders has intensified. According to the Reserve Bank's October 2025 Bulletin, variable lending rates for small businesses have fallen by slightly more than the cash rate, and the spread between SME and large business rates has narrowed to historical lows. Banks are strategically pivoting toward business lending, and non-bank lenders now account for a growing share of SME credit, particularly for smaller loans.

What this means practically: you have more leverage to negotiate rates, and if your main bank isn't competitive, alternatives exist. Broker origination has also increased, which helps match borrowers with lenders offering suitable terms.

2. Unsecured and non-property-secured finance is expanding

For years, the requirement to provide residential property as collateral has been a major barrier for small businesses. That's changing. The RBA reports that lenders have increased their willingness to provide unsecured credit or loans secured by non-physical assets like equipment, vehicles, or transaction data.

Balance sheet lenders and fintechs are driving much of this shift, using business transaction histories to assess creditworthiness rather than demanding property. The trade-off is typically higher interest rates, but for businesses without property to pledge, this opens doors that were previously closed.

3. ATO enforcement and Payday Super will drive funding demand

Tax obligations are becoming a primary trigger for business financing needs. The ATO has resumed enforcement actions on unpaid taxes, and stricter payment plans mean more businesses need capital to restructure obligations. Writing in The Adviser, Lumi's Anna Hawter and Ben Lamb forecast that ATO-driven funding will rank among the top triggers for SME finance by late 2026.

Adding to cash flow pressure: from 1 July 2026, employers must pay superannuation contributions every pay cycle rather than quarterly. This shifts super from a periodic expense to a continuous cash flow requirement. Businesses that haven't planned for this will face liquidity crunches.

4. Economic conditions remain mixed, with sector divergence

Business conditions have improved from recent lows but remain below long-run averages. Goldman Sachs' December 2025 analysis of the NAB Business Survey showed conditions at +7, around average, but confidence remains fragile. Retail took a significant hit (down 16 points), while construction and manufacturing also weakened.

Consumer sentiment declined further in January, with Goldman Sachs noting that two-thirds of consumers now expect mortgage rates to rise—the highest level since July 2024. This matters for businesses exposed to discretionary spending.

The bright spot: most small businesses remain profitable. Many have protected margins through cost-cutting, including reducing hours and headcount. Company insolvencies have risen from pandemic lows but remain around longer-term averages, concentrated in hospitality and construction.

5. Supply chain volatility is reshaping cash cycles

Global trade tensions, tariffs, and logistics disruptions are extending lead times and increasing inventory costs. Cash conversion cycles have become less predictable.

This is driving demand for flexible capital products, particularly lines of credit that can absorb working capital swings. Businesses managing inventory-heavy operations or international supply chains need funding structures that accommodate uncertainty rather than fixed-term loans that assume predictable cash flows.

What this means for your business

The lending environment is more competitive and accessible than it's been in years. Rates are down, unsecured options are expanding, and lenders are actively competing for business. At the same time, cash flow pressures from tax obligations, regulatory changes, and supply chain volatility are creating new financing needs.

The opportunity is to lock in better terms while competition remains intense. For those who've struggled to access finance without property security, it's worth exploring options that weren't available even two years ago.

A finance broker can help you navigate which lenders are best suited to your situation—whether that's a major bank, a specialist SME lender, or a non-bank option. With over 30 lenders in the market offering different products and criteria, the right match often isn't obvious.