Nearly two in five retail debts in Australia were not paid within 30 days in April, highlighting mounting cash flow pressures across the sector despite relatively stable business lending, according to new Equifax data.
The report found the proportion of retail debt paid within 30 days fell to 61 per cent in April from about 90 per cent in March, marking its lowest level since December 2024. Severe delinquencies also climbed, with debts more than 91 days overdue accounting for around 15 per cent of total retail debt.
Overall retail business credit demand fell 1.7 per cent year on year in May, while business loan demand was broadly flat, slipping 0.3 per cent. Asset finance demand, however, rose 3.3 per cent, driven by large retailers investing in equipment and upgrades in WA, Victoria and NSW.
The data also highlighted a widening gap between large retailers and SMEs. Large retailers in SA increased business loan demand by 17 per cent year on year, while SME demand in the state fell 29.3 per cent. Smaller retailers also cut back on asset finance in Queensland, WA and Victoria, suggesting many are prioritising cash preservation over expansion.
New ATO tax defaults rose 25.6 per cent year on year in May, although company adverse rates improved, falling 8.5 per cent over the same period.
Brad Walters, GM of commercial at Equifax, said the figures indicate retailers are facing tighter payment cycles, with smaller operators becoming increasingly cautious about borrowing and investment as liquidity pressures persist.
“As we continue to monitor the retail landscape, we are paying close attention to broader indicators of structural stress,” he said.
“The +25.6 per cent YoY increase observed in new retail ATO tax defaults aligns with tightening payment cycles, and can indicate that some retailers are managing their day-to-day liquidity constraints by delaying their tax obligations.”
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