According to the Australian Bureau of Statistics (ABS), there were 2 657 809 SMEs in Australia in 2023‑24. SMEs accounted for 99.8% of all enterprises in Australia and employed more than 8.5 million people in 2023-24, which equates to around 64.7% of employment in the private sector.
The Australian economy is emerging from a period of high inflation and is gradually gaining momentum. Headline inflation has moderated significantly from its peak. The unemployment rate remains low, and wages growth is forecast to remain above the pre-pandemic average rate. Real GDP grew by 1.4% in 2024-25 and according to economic forecasts produced by the Australian Department of the Treasury, reported in the 2025-26 Budget in March 2025, is expected to strengthen to 2.25% in 2025–26.
Interest rates for both SMEs and large businesses remain above pre-pandemic levels. Interest rates on outstanding SME loans in Australia increased slightly from 6.5% in 2023 to 6.6% in 2024, while interest rates on new loans stayed steady at 6.5% in 2023 and 2024. The interest rate spread between SME loans and large enterprise loans widened slightly in 2024 relative to 2023 but remained narrow at 76 basis points in 2024. In the decade prior to 2022, the spread typically ranged between 160 and 190 basis points. In the first half of 2025, interest rates on SME and large business loans declined alongside declines in the cash rate and bank bill swap rates.
New lending to SMEs increased from AUD 122.5 billion in 2023 to AUD 153.7 billion in 2024.1 In 2024, the share of SME outstanding loans stood at 52.7% of total outstanding business loans.
The total amount of venture capital invested by registered Early-Stage Venture Capital Limited Partnerships (ESVCLPs) and Venture Capital Limited Partnerships (VCLPs) decreased in 2022 by 14.27%, totalling AUD 1.83 billion, increasing in 2023 by 7.33% to AUD 1.96 billion, before rising to a record high of AUD 2.2 billion in 2024, an increase of 12.18%.
Leasing and hire purchase volumes increased by 6.7% through the year to AUD 13.1 billion in 2024. This compares to an increase of 25.9% in 2023 and a decrease of 5.4% in 2022.
There are two types of business insolvencies in Australia, corporate insolvencies and unincorporated insolvencies. The number of unincorporated insolvencies per 10 000 businesses increased from 19 in 2023 to 22 in 2024. The number of corporate insolvencies per 10 000 registered companies increased to 40 in December 2024 from historically low levels during the pandemic (which stood at around 15 on average between April 2020 and June 2022). This increase reflects a catch-up effect following suppressed insolvency activity during the pandemic and more challenging trading and economic conditions. Additionally, 18% of corporate insolvencies in 2024 were small business restructuring (SBR) appointments.
The SBR process is a simplified debt restructuring process designed to help eligible small businesses to successfully restructure its debts and remain in business. This process became available for eligible companies from 1 January 2021 and is one of the insolvency reforms, initially implemented to manage the potential impacts for firms from the pandemic and now permanently available. In its review of the SBR process for the period from July 2022 to December 2024, the Australian Securities and Investments Commission (ASIC) observed that the large majority of companies that completed an SBR plan remain registered.
The Australian Government has a comprehensive SME agenda aimed at making it easier for small businesses to do business, innovate, thrive and continue contributing to the Australian economy and communities. Its policies to promote SMEs focus on easing the pressure on small businesses, supporting small businesses to grow, and levelling the playing field for small businesses. Government policies on finance, taxation, competition and productivity aim to increase long-term opportunities for SMEs.