Financing SMEs and Entrepreneurs 2020

3. Australia

Key facts on SME financing

According to the Bureau of Statistics (ABS), there were 2 309 436 small and medium sized enterprises (SMEs) in Australia in 2017-18. SMEs account for 99.8% of all enterprises in Australia and employ more than 7.6 million people, which equates to around 68% of employment in the private sector.

The Australian economy has completed its 27th consecutive year of economic growth, and has performed remarkably well in adjusting from the investment phase of the mining boom towards broader-based sources of growth. Real GDP grew by 2.9% in 2017-18.

Interest rates are historically low for both SMEs and large businesses. SME interest rates in Australia have gradually declined from 8.6% in 2007 to 5.29% in 2018. The interest rate spread between SME loans and large enterprise loans increased from 96 basis points in 2007 to 183 basis points in 2008, and remained high at 200 basis points in 2017. However, the interest rate spread declined to 173 basis points in 2018.

New lending to SMEs declined in two consecutive years since 2015 (4.9% in 2016 and 8.1% in 2017) after a period of growth, having risen by 7.4% (2013), 7.9% (2014) and 6.7% (2015). Total outstanding SME loans increased by 3.8% in 2016 and 3.7% in 2017. In 2018, the share of SME outstanding loans stood at 29.48% of total outstanding business loans.

Total valuations of all investments by Venture Capital and Later Stage Private Equity (VC&LSPE) investment vehicles rose by 4.7% in 2015-16 and by 14.8% in 2016-17, from AUD 8 802 million reported as at 30 June 2015 to AUD 11 001 million as at 30 June 2018. Leasing and hire purchase volumes dropped from AUD 9 546 million in 2007 to a low of AUD 6 904 million in 2009. Leasing and hire purchase volumes have recovered since, rising to AUD 12 529 million in 2018, an increase of about 9% over the previous year.

The number of bankruptcies per 10 000 businesses increased from 45 in 2007 to 54 in 2013. It has since reached a ten-year low of 32 in 2018.

The Australian Government has a comprehensive SME agenda aimed at promoting growth, employment and opportunities across the economy. Its policies for promoting SMEs focus on reducing red tape, improving the operating environment for businesses, increasing incentives for investment, and enhancing rewards and opportunities for private endeavour. Policies aiming to increase long-term opportunities for SMEs include innovative finance and crowd-sourced equity funding; competition and consumer policies; taxation and business incentives; export financing; and small business assistance.

Table 3.1. Scoreboard for Australia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Debt
Outstanding business loans, SMEs	AUD billion	188.7	203.9	203.6	223.6	234.3	238.3	241.4	250.0	260.4	270.4	280.3	285.4
Outstanding business loans, total	AUD billion	710.3	771.3	720.7	705.1	713.8	736.8	748.6	783.3	833.6	879.6	907.3	968.1
Share of SME outstanding loans	% of total outstanding business loans	26.57	26.43	28.25	31.71	32.82	32.34	32.24	31.91	31.24	30.74	30.90	29.48
New business lending, total	AUD billion	375.0	336.1	265.5	265.8	310.7	273.8	292.4	360.5	391.7	341.8	346.0	346.9
New business lending, SMEs	AUD billion	77.5	79.9	69.6	82.5	81.6	73.7	79.1	85.4	91.2	86.7	79.7	76.7
Share of new SME lending	% of total new lending	20.67	23.77	26.20	31.04	26.25	26.91	27.06	23.69	23.27	25.37	23.03	22.11
Non-performing loans, total	% of all business loans	0.50	2.07	3.27	3.55	3.16	2.68	2.03	1.39	1.01	1.13	0.78	0.81
Interest rate, SMEs	%	8.56	7.99	7.56	8.29	7.94	7.07	6.43	6.18	5.58	5.29	5.23	5.29
Interest rate, large firms	%	7.60	6.16	5.85	6.67	6.37	5.29	4.29	4.15	3.59	3.20	3.23	3.56
Interest rate spread	% points	0.96	1.83	1.71	1.62	1.57	1.78	2.14	2.03	1.99	2.09	2.00	1.73
Non-bank finance
Venture and growth capital	AUD billion	6.94	8.32	7.90	8.91	8.70	7.65	8.35	7.91	8.80	9.21	10.58	11.00
Venture and growth capital (growth rate)	%, Year-on-year growth rate	..	19.83	-4.95	12.77	-2.38	-12.05	9.10	-5.28	11.32	4.67	14.78	4.03
Leasing and hire purchases	AUD billion	9.55	9.34	6.90	7.14	7.58	8.69	7.55	8.69	10.37	9.47	11.52	12.53
Factoring and invoicing	AUD billion	54.76	64.99	63.10	58.66	61.42	63.36	63.27	62.39	64.40	..	..	..
Other indicators
Payment delays, B2B	Number of days	..	..	..	..	22	20	20	15	13	14	12	10
Bankruptcies, Unincorporated	Number	5 045	4 427	4 426	5 616	5 266	5 858	4 761	4 007	4 088	4 350	4 168	4 291
Bankruptcies, Unincorporated	Per 10 000 enterprises	42	36	36	45	43	50	42	35	34	36	34	36
Bankruptcies, Corporates	Number	7 489	9 067	9 465	9 605	10 439	10 583	10 854	8 822	10 093	8 511	7 819	8 052
Bankruptcies, Corporates	Per 10 000 companies	48	55	56	54	57	55	54	41	45	36	31	31
Bankruptcies, Total	Per 10 000 businesses	45	47	47	50	51	53	49	39	41	36	32	32
Invoice payment days, average	Number of days	53	56	54	53	54	53	54	53	47	..	..	..
Outstanding business credit, Unincorporated business	AUD billion	111	117	119	122	125	131	136	142	150	157	164	165
Outstanding business credit, Private trading corporations	AUD billion	500	555	514	500	514	524	531	556	592	626	636	663

Source: Table 3.4

SMEs in the national economy

According to the Bureau of Statistics (ABS), there were 2 309 436 small and medium sized enterprises (SMEs) in Australia in 2018, accounting for 99.8% of all businesses. The majority of Australian businesses are non-employing (62% of small businesses or 1 435 547). Most employing businesses (27.1% or 627 932) employed between 1 and 4 people, whilst 0.2% (3 855) of employing businesses employed more than 200 people.

In 2017-18, SMEs employed more than 7.6 million people, which equates to around 68% of employment in the private sector.

The contribution of Australian SMEs to exports is disproportionately low. In 2015-16, their contribution to the value of exports was only about 6%. Over the last decade, the value of SMEs’ exports have remained stagnant at around AUD 12 billion per year, while the value of exports of large businesses have increased by 48% between 2006-07 and 2015-16 from AUD 155 billion to AUD 231 billion.

Table 3.2. Distribution of firms in Australia, 2017-18

Firm size (employees)	Number	%
All firms	2 313 291	100
SME (0-199)	2 309 436	99.8
Non-employing (0)	1 435 547	62.1
Micro (1-4)	627 932	27.1
Small (5-19)	195 619	8.5
Medium (20-199)	50 338	2.2
Large (200+)	3 855	0.2

Note: Data excludes financial, insurance and public sector enterprises.

Source: Australian Bureau of Statistics Cat no. 8165.0.

Macroeconomic conditions

The Australian economy has completed its 27th consecutive year of economic growth, with real GDP growth of 2.9% in 2017-18. It is forecast to grow by 2.25% in 2018‑19 before strengthening to 2.75% in 2019-20 and 2020‑21. Domestic demand is expected to strengthen over the forecast period as mining investment starts to rise again, and growth in household consumption and non-mining business investment increases. Export growth is forecast to slow to 1.5% in 2020-21, largely as growth in mining exports slow. Labour market conditions continue to be strong, with business profits helping to sustain strong employment growth.

Economic momentum continues to be supported by favourable fundamentals. The Reserve Bank of Australia (RBA)’s official cash rate was lowered further in June to a new historical low of 1.25%. This will continue to support both the household and business sectors.

Table 3.3. Key domestic economic forecasts for Australia (a)

Indicators	Outcomes(b)	Forecasts
	2017-18	2018-19	2019-20	2020-21
Real gross domestic product	2.9	2.25	2.75	2.75
Household consumption	2.8	2.25	2.75	3
Dwelling Investment	0.5	0.5	-7	-4
Business investment (c)	6.3	1	5	4.5
Mining investment	-4.0	-10.5	4	4.5
Non-mining investment	10.0	4.5	5.5	4.5
Public final demand (c)	4.4	5.5	3.25	3
Net exports (d)	- 0.6	0.5	0.25	-0.25
Nominal gross domestic product	4.7	5	3.25	3.75

(a) Percentage change on preceding year unless otherwise indicated. (b) Calculated using original data unless otherwise indicated. (c) Excluding second‑hand asset sales from the public sector to the private sector. (d) Percentage point contribution to growth in GDP. 

Note: The forecasts for the domestic economy are based on several technical assumptions. The exchange rate is assumed to remain around its recent average level — a trade-weighted index of around 61 and a USD exchange rate of around USD 71 cents. Interest rates are assumed to move broadly in line with market expectations. World oil prices (Malaysian Tapis) are assumed to remain around USD 67 per barrel. 

Source: ABS cat. no. 5206.0, 5302.0, 6202.0, 6345.0, 6401.0, unpublished ABS data and Treasury.

Following robust growth of 10.0% in 2017-18 which was broad-based, across a wide range of industries, non-mining business investment is expected to grow by 5.5% in 2019-20 and 4.5% in 2020-21. An elevated pipeline of building and engineering work is expected to support growth. In terms of risks, declines in business conditions and confidence could weigh on the outlook, though business investment could benefit from additional opportunities arising from large public infrastructure projects.

Figure 3.1. Business investment in Australia as a share of GDP

Source: ABS cat. no. 5204.0 and the Treasury, Australian Government.

Statlink

SME lending

New lending to SMEs declined in three consecutive years since 2015 (by 4.9% in 2016, 8.1% in 2017 and 15.9% in 2018) after a period of growth, having risen by 7.4% (2013), 7.9% (2014) and 6.7% (2015). Since 2015, total outstanding SME loans increased by 3.8% in 2016, 3.7% in 2017 and 9.6% in 2018. In 2018, the share of SME outstanding loans stood at 29.5% of total outstanding business loans, a decrease of 1.42 percentage points over the share in 2017.

The RBA’s liaison programme and available data suggest that Australian SMEs are finding it more difficult to access finance through the banking system. Small businesses in the start-up or expansion phase without high quality collateral have particular difficulty accessing external finance.

Credit conditions

Total business credit grew by 4.5% in the twelve months to April 2019. Credit growth has recovered since mid-2011 after falling in the aftermath of the Global Financial Crisis.

Business borrowing rates are historically low for both SMEs and large businesses. Data from the RBA shows that SME interest rates in Australia have gradually declined from 8.6% in 2007 to 5.3% in 2018. However, RBA data also shows that the interest rate spread between loans charged to large enterprises and to SMEs increased from 96 basis points in 2007 to 183 basis points in 2008, and has since remained higher. In 2018, the interest rate spread dropped to 173 basis points. This could be one factor that helps explain why small businesses may find it challenging to obtain finance, and in part, reflects a reassessment of the riskiness of SME lending, when compared with other lending as well as the lack of information available to lenders about the prospects of SMEs.

Alternative sources of SME financing

Total valuations of all investments by Venture Capital and Later Stage Private Equity (VC&LSPE) investment vehicles rose by 4.7% in financial year 2015-16, 14.8% in 2016-17, and 4% in 2017-18 from AUD 8 802 million reported as at 30 June 2015 to AUD 11 001 million as at 30 June 2018.

Leasing and hire purchase volumes dropped from AUD 9 546 million in 2007 to a low of AUD 6 904 million in 2009. Leasing and hire purchase volumes have recovered since, rising to AUD 12 529 million in 2018, an increase of 8.8% over the previous year.

Surveys show that alternative finance instruments such as equity crowdfunding, peer to peer, invoice and balance sheet lending continue to grow, as depicted in the Figure 3.2 below.

Figure 3.2. Alternative sources of SME financing

In USD million

Note: Data from the 3rd Asia-Pacific Region Alternative Finance Report, December 2018, by the Cambridge Centre for Alternative Finance, the Academy of Internet Finance at Zhejiang University, and the Asian Development Bank Institute, in collaboration with KPMG, Invesco and CME Group Foundation.

Statlink

Other indicators

The number of bankruptcies per 10 000 businesses increased from 45 in 2007 to 53 in 2012. It has since dropped to 32 in 2018.

Non-performing loans as a percentage of total outstanding business loans also increased in the aftermath of the financial crisis, from 0.5% in 2007 to 3.6% in 2010. Since 2010, the proportion of non-performing loans declined to 0.8% in 2018.

Government policy response

The Australian Government has a comprehensive SME agenda aimed at promoting growth, employment and opportunities across the economy. Its policies for promoting SMEs focus on reducing red tape, improving the operating environment for businesses, increasing incentives for investment, and enhancing rewards and opportunities for private endeavour. The Government’s financial, taxation and competition policies are also designed to increase long-term opportunities for SMEs.

The challenge of obtaining finance has been a consistent theme of the RBA’s Small Business Finance Advisory Panel. The challenges faced by small businesses when borrowing include access to finance for start-ups, the heavy reliance on secured lending, the role of housing collateral and personal guarantees in lending and the loan application process, including the administrative burden and the ability to compare products across as well as to switch lenders. The Australian Government’s recent reforms (discussed below) could help to improve access to finance by providing lenders with more information about the capacity of borrowers to service their debts, and connecting risk-seeking investors with start-up businesses that could offer high(er) returns.

Liaison with industry

A strong financial system that facilitates the flow of savings to efficient investment opportunities assists SMEs to invest in new technologies, fund innovative practices and expand. Government authorities regularly monitor developments in SMEs’ access to finance. The RBA annually hosts a Small Business Finance Advisory Panel, while both the RBA and the Australian Treasury regularly speak with Australian banks, non-bank lenders and businesses about business financing conditions, as well as the broader economic environment for businesses.

Comprehensive credit reporting

In Australia, customers deal with a system dominated by major banks and this reinforces an information asymmetry between consumers, banks and non-bank lenders. For several years, the finance industry has attempted to establish a voluntary comprehensive credit reporting regime in Australia.

As part of the Australian Government’s agenda to improve competition in the financial system, the Government announced on 2 November 2017 the introduction of mandatory Comprehensive Credit Reporting (CCR). CCR will give lenders access to a deeper, richer set of data enabling them to better assess a borrower’s true credit position and their ability to pay a loan. The accurate assessment of credit risk may lead to the reduction in the need for lenders to seek additional collateral and personal guarantees. CCR is also expected to benefit consumers, who will be able to better demonstrate their reliability and thus get better deals on financial products. The Government expects to re-introduce legislation implementing reforms to CCR this year.

Open Banking

On 9 May 2018, the Government agreed to all the recommendations of the Review into Open Banking in Australia (Farrell Review). Open Banking will give customers greater access to and control over the data their banks hold on them. It will create a secure environment, where customers can direct that they, or trusted and accredited third parties chosen by them, be provided with their banking data.

Open Banking will lead to more competitive banking products that better suit a customer’s needs. It will also encourage the development of new and innovative financial tools to help customers more easily manage their finances.

The Government has outlined a phased implementation timetable:

• In July 2019, all major banks will voluntarily make available product reference data in relation to credit and debit card, deposit and transaction accounts. This will become mandatory once the reforms have passed Parliament.

• By 1 February 2020, all major banks will be required to make available to customers data on credit and debit card, deposit, transaction and mortgage accounts.

• By 1 July 2020, major banks will need to make available data on all the remaining products recommended by the Farrell Review.

• All remaining banks will be required to implement open banking milestones twelve months after the timeline for the major banks.

The introduction of Open Banking will make it easier for entrepreneurs to share banking data securely with third-party service providers, such as non-bank lenders. Non-bank lenders can benefit from Open Banking by becoming accredited to receive customer banking data (including transaction and product data). This will provide greater transparency for non-bank lenders when they are making a credit assessment and will lead to the reduction in the cost of assessing credit risk.

The Australian Prudential Regulation Authority proposed revisions to the capital framework

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. On 14 February 2018, APRA commenced consultation on revisions to the capital framework for authorised deposit-taking institutions (ADIs). The proposed changes to the capital framework include amendments to the treatment of exposures to SME loans, including those secured by residential property, and the recognition of additional types of collateral for SME lending. The proposed changes to the capital framework are expected to be implemented from January 2021 onwards.

Financial Services Royal Commission

The Australian Government established a Royal Commission into the alleged misconduct of Australia’s banks and other financial services entities on 14 December 2017 to ensure the financial system is working efficiently and effectively. The Commission considered the conduct of banks, insurers, financial services providers and superannuation funds. It also considered how well equipped regulators are to identify and address misconduct. The Commission undertook public hearings, with hearings on loans to SMEs conducted in May-June 2018. An interim report was released on 28 September 2018 and the final report was released along with the Government response on 4 February 2019. The Government is taking action on all 76 recommendations made by the Commission in its final report.

The Productivity Commission’s Inquiry into Competition in the Australian Financial System

On 8 May 2017, the Government tasked the Productivity Commission to undertake an inquiry into Competition in Australia’s financial system. The Productivity Commission has reviewed competition in Australia’s financial system with a view to improving productivity, supporting financial system innovation and stability, and improving consumer outcomes including for small businesses. The scope of the inquiry also includes an examination of the degree and nature of competition and financial services for SMEs, and any barriers to and enablers of innovation and competition in the financial system.

The Productivity Commission’s final report was released on 3 August 2018.

Australian Securities and Investment Commission’s (ASIC) Regulatory Sandbox

On 15 December 2016, ASIC introduced industry wide licensing exemptions to allow eligible FinTech businesses to test certain specified services for up to 12 months without an Australian financial services or credit licence. Eligible companies need only send ASIC written notice of their intention to test under the exemption.

The regulatory sandbox provides a flexible regulatory framework, which makes it easier for FinTech companies to test the viability of innovative financial services, increasing the potential for new finance options.

On 9 May 2017, the Government announced an enhanced regulatory sandbox. Legislation for an enhanced regulatory sandbox will shortly be introduced to the Parliament, which will allow more businesses to test a wider range of new financial products over a longer period, further facilitating innovative new finance.

Payment on time

Australian business surveys consistently show that cash flow and late payments is a prime concern of SMEs in Australia. In supporting SMEs in this area, the Australian Government has commitments to procure goods and services from SMEs through a focussed 35% target from SME participation in contracts valued up to AUD 20 million. From July 2019, the Government will be required to pay invoices for contracts worth up to AUD 1 million within 20 calendar days. The Government is encouraging large businesses to pay small business on time by developing an annual reporting framework requiring firms with over AUD 100 million turnover to publish information on their small business payments. Large businesses tendering for Government contracts will be required to match the Government’s 20 day payment terms. Government agencies already report on their payment times for small business.

Innovative finance and crowd-sourced equity funding

New forms of innovative finance, such as peer-to-peer lending and crowd-sourced equity funding (CSEF), can increase the funding options available to SMEs. The peer-to-peer lending sector, for instance, has been emerging under existing regulatory arrangements.

The Government has introduced a CSEF framework for public companies, which commenced on 29 September 2017 and will provide a new funding avenue for early stage businesses, whilst still providing a level of investor protection. The Government has extended the CSEF regime to enable more closely held proprietary companies to raise funds through CSEF, with accompanying modifications to increase accountability and investor protection. An appropriately regulated framework will ensure that Australia remains responsive to the funding needs of innovative businesses.

Australian Business Securitisation Fund

On 14 November 2018, the Government announced the creation of a AUD 2 billion Australian Business Securitisation Fund. The fund will invest in the securitisation market, providing additional funding to smaller banks and non-bank lenders to on-lend to small businesses.

The Government has established a AUD 2 billion Australian Business Securitisation Fund, which commenced on 1 July 2019. The fund, administered by the Australian Office of Financial Management, will invest in the securitisation market, providing additional funding to smaller banks and non-bank lenders to on-lend to small businesses.

Australian Business Growth Fund

The Government is encouraging the creation of a Business Growth Fund that would provide longer term equity funding to small businesses. The Government has committed to invest AUD 100 million into the Fund.

Taxation and business incentives

On 7 December 2015, the Australian Government announced a suite of new tax and business incentive measures under the National Innovation and Science Agenda (NISA). The measures include tax concessions for early stage investors in early-stage innovation companies. Eligible investors can claim a 20% non-refundable, carry-forward tax offset, capped at AUD 200 000 per investor per year, as well as an exemption from capital gains tax, provided investments are held for at least 12 months. Another NISA measure is the introduction of a 10% non-refundable, carry-forward tax offset for capital invested in new Early Stage Venture Capital Limited Partnerships (ESVCLPs), and an increase in the cap on committed capital from AUD 100 million to AUD 200 million for new and existing ESVCLPs.

Reducing costs for SMEs is a priority for the Government, as this is a key way to improve the financial viability of their operations, and thereby encourage additional investment. Small business tax concessions are generally available to businesses with aggregated annual turnover less than AUD 10 million. Most notably, the Government has lowered taxes and compliance costs for small business by:

• Increasing the instant asset write-off threshold for capital expenditure to AUD 30 000, expanding access to medium-sized businesses (with aggregated annual turnover less than AUD 50 million), and extending it to 30 June 2020;

• Cutting the tax rate for small (and medium) sized incorporated businesses with aggregated annual turnover less than AUD 50 million from 30% to 27.5% in 2018-19, and further to 26% in 2020-21 and 25% in 2021-22;

• Increasing the tax discount rate for small unincorporated businesses from 8% currently to 13% in 2020-21 and to 16% in 2021-22 (up to a cap of AUD 1 000 for unincorporated small businesses with an aggregated turnover below AUD 5 million);

• Streamlining GST reporting for around 2.7 million small businesses.

Many SMEs in Australia are engaged in primary production, and they face significantly greater levels of risk, largely due to seasonal factors and fluctuations in commodity markets. As higher levels of risk discourage SMEs from investing in new operations, Australia has put in place a number of tax measures to allow these SMEs to better manage this risk, including:

• Income tax averaging for primary producers; and

• Farm Management Deposits, which provide a tax incentive to better managing income fluctuations associated with price variability and seasonal variations.

In relation to SME employment, the reform of taxation arrangements of Employee Share Schemes (ESS) provides incentives for new start-ups, thus encouraging them to grow and invest in new capacity. Firstly, employees who are issued with options under an ESS are now generally able to defer tax until they exercise the options (convert the options to shares), rather than having to pay tax when they receive the options (and often before any benefit is realised). Secondly, eligible start-ups are now able to issue options or shares to their employees at a small discount, and have that discount exempt (for shares) or further deferred (for options) from income tax. The changes are designed to make Australia’s taxation of ESS more competitive by international standards, and allow innovative Australian firms to attract and retain high-quality employees.

In addition to the tax changes, the Australian Taxation Office has issued standardised employee share scheme plans and safe harbour valuation methods to make it easier for firms to establish and administer an employee share scheme.

Export financing

The global economy provides Australian SMEs with an opportunity to access new markets and the government is committed to helping SMEs reach their export potential.

The Government has committed AUD 20 million over four years from 2018-19 to establish a Small and Medium Enterprises Export Hubs program. The Hubs will enable cooperation and boost export capability of local and regional businesses, through support to develop collective brands, leveraging local infrastructure to scale business operations, and positioning regional businesses to participate in global supply chains.

Export Finance Australia is Australia’s export credit agency. Through its loans, guarantees, bonds and insurance products, Export Finance Australia has helped many Australian exporters and subcontractors to take advantage of new business opportunities that may otherwise have been out of reach. In 2019, the Government passed legislative amendments to provide Export Finance Australia with additional capital and new powers to finance overseas infrastructure projects in the Indo-Pacific region. An enhanced role for Export Finance Australia in infrastructure financing will boost its ability to support Australian businesses, including SMEs, which have the specialised skills and knowledge that underpin major projects, especially through the supply chain. The amendments also establish the new, simpler name of ‘Export Finance Australia’ (previously the Export Finance and Insurance Corporation) that provides greater brand recognition for the agency and the Australian Government with Australian SMEs, other exporters and counterparties and in important overseas markets.

These reforms complement Australia’s strategies to expand opportunities for businesses, including SMEs, under Australia’s free trade agreements.

Figure 3.3. Trends in SME and entrepreneurship finance in Australia

Source: See Table 3.4.

Statlink

Table 3.4. Definitions and sources of indicators for Australia’s scoreboard

Indicator	Definition	Source
Debt
Outstanding business loans, SMEs	Banks’ business loans and bills outstanding under AUD 2 million (stock).	APRA; RBA
Outstanding business loans, total	Banks’ and non-bank financial institutions’ total credit outstanding to businesses; including loans, bills, commercial paper and promissory notes (stock).	APRA; RBA
New business lending, total	Banks’ new commercial loan approvals for fixed and revolving facilities (flow).	APRA; RBA
New business lending, SMEs	Banks’ new commercial loan approvals for fixed and revolving facilities under AUD 2 million (flow).	APRA; RBA
Non-performing loans, total	Banks' impaired (in arrears or otherwise doubtful, and not well-collateralised) and past due (in arrears for 90+ days but well-collateralised) business loans.	APRA; RBA
Interest rate, SMEs	Weighted-average interest rate on banks’ business loans and bills outstanding under AUD 2 million.	APRA; RBA
Interest rate, large firms	Weighted-average interest rate on banks’ business loans and bills outstanding AUD 2 million and over.	APRA; RBA
Non-bank finance
Venture and growth capital	Venture capital and later stage private equity by resident venture capital and LSPE vehicles in Australian companies (flow). See ABS publication 5678.0 - Venture Capital and Later Stage Private Equity for further breakdowns.	ABS
Leasing and hire purchases	Banks’ and non-bank financial institutions’ new lease approvals (including finance and operating leases), excluding approvals for leasing of land and buildings (flow).	APRA; RBA
Factoring and invoicing	Factoring and invoice discounting turnover volumes of resident debtor finance providers (flow).	DIFA
Other indicators
Payment delays, B2B	Average late payment time (days after an invoice is due) for an Australian business.	Dun & Bradstreet
Invoice payment days, average	Average invoice settlement times for Australian business (days from transaction). Survey data from debt collection agency.	Dun & Bradstreet
Bankruptcies, Unincorporated	Number of unincorporated business bankruptcies.	AFSA
Bankruptcies, Unincorporated (per 10 000 enterprises)	Number of unincorporated business bankruptcies per 10 000 entrepreneurs.	ABS; AFSA; RBA
Bankruptcies, Corporates	Number of corporate insolvencies	ASIC
Bankruptcies, Corporates (per 10 000 companies)	Number of corporate insolvencies per 10 000 enterprises.	ABS; ASIC; RBA
Bankruptcies, total (per 10 000 businesses)	Number of corporate insolvencies and unincorporated business bankruptcies per 10 000 enterprises.	ABS; AFSA; ASIC; RBA
Outstanding business credit, Unincorporated business	Banks’ and non-bank financial institutions’ total credit outstanding to unincorporated business; including loans, bills, commercial paper and promissory notes (stock).	APRA; RBA
Outstanding business credit, Private trading corporations	Banks’ and non-bank financial institutions’ total credit outstanding to private trading corporations; including loans, bills, commercial paper and promissory notes (stock).	APRA; RBA

References

The 3rd Asia-Pacific Region Alternative Finance Report, 2018, Cambridge Centre for Alternative Finance, the Academy of Internet Finance at Zhejiang University, and the Asian Development Bank Institute, in collaboration with KPMG, Invesco and CME Group Foundation, https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2018-3rd-asia-pacific-alternative-finance-industry-report.pdf (accessed 6 June 2019).