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This survey records respondents’ expectations for FY2024, not current Australian business behaviour.
Are businesses more conservative in their borrowing and investing in fy 2024?
About the study
SMB Loan commissioned a survey of 202 SME directors and decision makers across the full SME spectrum: micro (1 to 4 employees), small (5 to 19 employees) and medium sized businesses (20 to 200 employees) to find out whether Australian SMEs are more conservative with their financing and investing in the 2024 financial year.
The page was published on 28 November 2023 and the report is labelled December 2023. The fieldwork month has not been verified; the publication date and report label are both retained. Recruitment methods, response rate, weighting and respondent counts for each state and business-size group are not available in the retained records. No subgroup counts have been inferred from rounded percentages. Treat the breakdowns as descriptive results; they do not establish national representativeness or statistically reliable differences between groups.
Respondents were asked if, and how, they are more conservative with their borrowing this fiscal year. Respondents could select from one of the below answers:
- Yes, I am spending more time sourcing and comparing the best value loan for my business.
- Yes, I am spending more time considering applying for a loan.
- Yes, I have decided not to go ahead with a loan, after initial enquiries.
- Yes, I am seeking out smaller loan amounts than I normally would have.
- No, I am not more conservative in my borrowing .
The survey also asked respondents whether they have been more conservative in investing in their business (for example, purchasing capital equipment or growing their team) this fiscal year
Will businesses be more conservative with their borrowing in fy 24?
SMB Loan revealed that 90 per cent of the 202 SME decision-makers surveyed are more conservative in their borrowing this fiscal year.
Specifically, 45 per cent are spending more time sourcing and comparing the best value loan for themselves, 23 per cent are spending more time considering whether they need to apply for a loan. A further 12 per cent revealed that they have decided not to go ahead with a loan after initial enquiries and 10 per cent said they are seeking out smaller loan amounts than in previous years.
The largest group spent more time comparing loans, which differs from abandoning an application or requesting less money. These answers describe FY2024 intentions, not completed lending transactions. Use the response options and business-size definitions in this report when comparing groups.
Are you more conservative in your borrowing in FY 24?
By State.
Across the States, Victorian businesses are most likely to be more conservative in their borrowing in FY 24, with 96 per cent of business owners stating so. This compares with 92 per cent of SA businesses, 91 per cent of WA businesses, 87 per cent of Queensland businesses and 85 per cent in NSW.
Would spend more time comparing loans for value:
- 50% of businesses in WA
- 44% of businesses in Victoria
- 36% of business in NSW
- 31% of businesses in SA
- 54% of respondents in Queensland
Businesses in South Australia are more likely to spend a greater amount of time considering loan applications (chosen by 30%), as well as choosing not to go ahead with a loan in 2024 after initial enquiries (chosen by 23%).
The data also found that businesses in Victoria are more likely to seek out a smaller loan than previous years (chosen by 17%).
| Responses | State (%) | ||||
|---|---|---|---|---|---|
| NSW | VIC | QLD | SA | WA | |
| Yes, I am spending more time sourcing and comparing the best value loan for me | 36% | 44% | 54% | 31% | 50% |
| Yes, I am spending more time considering applying for a loan | 27% | 21% | 19% | 30% | 18% |
| Yes, I have decided not to go ahead with a loan, after initial enquiries | 11% | 14% | 7% | 23% | 18% |
| Yes, I am seeking out smaller loan amounts than I normally would have | 11% | 17% | 7% | 8% | 5% |
| No, I am not more conservative in my borrowing | 15% | 4% | 13% | 8% | 9% |
By business size.
SMB Loan found nearly all (97%) of medium sized businesses are more conservative with their borrowing in FY 24. This compares with 90 per cent of micro businesses and 82 per cent of small businesses.
Specifically, more than half (54%) of micro businesses are spending more time sourcing and comparing the best value loan for their business. This compares to 39 per cent of medium sized businesses and only 28 per cent of small businesses.
Medium sized businesses are more likely to spend more time considering applying for a loan (32% stating so). They are also more likely to not go ahead with a loan after initial enquiries, with 16 per cent stating so.
Small business on the other hand are more likely to seek out smaller loan amounts than usual (16% stating so), followed by medium sized businesses (10%) and micro business (9%).
Are directors & decision makers holding back investing in their businesses in fy 2024?
The research found that 69 per cent of surveyed directors and decision-makers plan to hold back their business investments such as purchasing capital equipment or growing their team, due to the current economic environment. This compares with only 31 per cent who are continuing to invest in their business.
Are you more conservative in investing in your business in FY 24?
SMB Loan found that businesses in Queensland and South Australia are equally most likely to be more conservative in investing back into their business in FY 24, with 77 per cent from each State admitting that the current economic environment has contributed to their decision.
Across business sizes, a higher proportion of micro businesses are reluctant to invest back into their businesses, with 78 per cent stating that the current economic environment has contributed to their decision to hold back. This compares with 66 per cent of medium sized businesses and 59 per cent of small businesses that said the same.
Compare different periods without treating intentions as lending
The FY2026 capital-investment survey asked a later sample about planned expenditure and barriers. The ABS borrowing study instead measures new loan commitments. The datasets provide different perspectives and do not establish what these 202 respondents eventually borrowed.