The last few days of business news have been busy, and most of it lands directly on the desks of business owners and CFOs. Inflation has lifted to a level we have not seen since 2023, the Reserve Bank board meets next Tuesday with markets pricing in another rate rise, ATO collection activity continues to escalate, and capital is quietly flowing into private markets at a pace that is reshaping who funds Australian business. None of this is happening in isolation, and the decisions you make over the next month or two will be shaped by how these forces interact. Here is what we are watching, and what we think it means for the way you fund and structure your business.
Inflation has bitten back
The Q1 inflation figures landed and they are not pretty. Headline CPI rose 1.4% over the quarter and lifted to 4.1% over the year, the fastest pace since September 2023 (ABS, Q1 2026). Petrol prices were the big mover, jumping around 33% in March alone as the Middle East conflict tightened global oil supply. Electricity prices also rose sharply, up 17.8% over the quarter as the federal government’s energy rebates rolled off in December.
Strip out the volatile items and the picture is a touch more reassuring. The trimmed mean, which the RBA watches more closely, came in at 0.8% over the quarter and 3.5% year on year, slightly below market and central bank forecasts. Domestic services inflation softened, helped by weaker holiday travel pricing.
The comfort is thin, though. Business surveys are flagging that the cost shock from oil has not fully fed through yet. Output price expectations have surged to their highest level since late 2022, and consumer inflation expectations have lifted sharply over the past two months. The April CPI release, due in around four weeks, will be the first proper read on how widely those costs are being passed on. If the answer is broadly, we are looking at a longer fight with inflation than anyone wanted.
The cash rate path is firming up
With this backdrop, the RBA board is widely expected to lift the cash rate by 25 basis points next Tuesday, taking it from 4.10% to 4.35%. That would be the third hike in this short cycle, and the market view is that it will not be the last. Some forecasters now expect further rises in June and August before the board pauses to assess the damage.
For business owners on variable rate debt, this means the easing cycle that many were positioning for is gone for now. We are working with clients to model two scenarios: one where the cash rate peaks at 4.35%, and another where we see another 50 basis points on top before the year is out. The cash flow difference between those paths is significant, particularly on larger commercial property and equipment finance facilities.
If you have not stress-tested your loan book against a higher-for-longer rate environment, now is a good time. Fixed rates, hedging tools, blended structures and revolving facilities all behave differently when the curve steepens, and the right mix is rarely the one you set up two years ago.
Banks and non-banks are pricing differently
On the lending side, we are seeing a wider gap open up between major banks and non-bank specialists. The majors have been slower to move on serviceability buffers and have not always passed funding cost movements through cleanly. Non-banks, with a more flexible funding base, are showing more willingness to compete on commercial property, asset finance and working capital products.
Industry data this week supports what we are seeing in our own pipeline. More than half (53%) of brokers expect business loan demand to rise over the next three months, with healthcare, mining and real estate leading the way for new finance enquiries (Broker Pulse, March 2026). Approval speed is also separating the field. Some non-bank business loan providers are turning around credit decisions in under one business day, while several majors are still working in five to ten day windows on complex commercial files.
This matters because timing is often the deciding factor on whether a deal lands. If you are weighing a bank facility against a non-bank alternative, the headline rate is only part of the story. Speed, flexibility on covenants, the credit team’s appetite for your sector, and how the lender handles a wobbly trading month or a one-off ATO debt all change the real cost. We are also seeing some non-banks lean further into specialised asset finance, which is opening up options for clients who would historically have settled for whatever the major banks offered.
The ATO is sharpening its teeth
The other story we cannot ignore is the ATO. Total collectable tax debt has reached a record of more than $50 billion, and the office has made clear that recovery is now a top priority. Director Penalty Notices, garnishee orders and credit reporting are all being used more frequently, and we have seen this play out in our own client base over the last six months.
The pressure point for many small and medium businesses is the general interest charge, currently sitting at 10.5%. On a debt that has been outstanding for a couple of years, that compounding charge can almost double the original liability. One financial counselling service reported a 21% lift in calls last year, with the median debt size around $70,000 and 64% of cases involving ATO debt (Small Business Debt Helpline, 2025).
The ATO is reviewing its relief provisions and has flagged that findings are coming. In the meantime, the practical advice we are giving business owners is simple. Do not let an ATO debt sit. Engage early, document hardship clearly, and look at whether the debt can be refinanced into a structured facility with a clear repayment runway. We are also seeing more clients use commercial property equity to retire ATO arrears and bring the cost of capital down from that 10.5% GIC to something far more manageable.
A separate ATO message worth flagging is the focus on tax-time accuracy. The office has signalled it will scrutinise work-related deductions and omitted income, with penalties of 25% to 75% for false or misleading claims. Social media tax tips, AI generated advice, and well-meaning hot tips from friends are not a defence. The responsibility sits with the lodger.
Private capital is rewriting the funding landscape
Behind all of this is a structural shift in where Australian business borrows from. Local institutions are moving into private markets faster than their global peers. Around 93% of Australian institutional investors plan to lift their private market allocations over the next five years, with 77% expecting private assets to make up more than a fifth of their portfolios (Nuveen EQuilibrium survey, 2026).
The biggest mover within that has been private credit, which is the broad term for non-bank lending into corporate, real estate and infrastructure deals. Private credit has shifted from a niche allocation to a mainstream funding source, and that has practical consequences for the businesses we work with. Deals that the major banks cannot or will not do, whether due to scale, sector or balance sheet flexibility, are increasingly being placed with private credit lenders. Pricing is generally above bank debt, but structures are often more flexible, covenants more practical, and execution faster.
For owners considering acquisitions, expansion capital, property development or restructuring senior debt, private credit is now part of the conversation in a way it was not five years ago. The regulator has flagged it wants to see stronger transparency and liquidity discipline in the sector, which is a healthy development, but the trajectory is clear. Private capital is staying.
Where this leaves us
Pulling these threads together, we see a few practical implications for Australian business owners and CFOs over the next quarter.
First, stress-test debt facilities against a cash rate of 4.35% and again at 4.85%. If the second scenario hurts, look at fixed rate or blended structures now while the curve is still moving. Second, treat any ATO arrears as urgent. The interest cost alone makes refinancing the debt into commercial facilities worth investigating, and the ATO’s posture is unlikely to soften any time soon. Third, do not assume your bank is the cheapest or fastest lender for your next deal. Non-bank and private credit providers have closed the gap on price and pulled well ahead on speed for many sectors and deal sizes. Fourth, if you have a tax lodgement coming, be careful about anything you have read on social media or generated through an AI tool, and use a registered agent.
If any of this is sitting on your mind, get in touch. Whether you are weighing a refinance, planning an acquisition, or trying to ease pressure on cash flow, a short conversation usually maps out the most cost-effective path forward. We work across business, commercial property and asset finance, and our role is to do the heavy lifting so you can keep running your business.
Disclaimer
The content above is general information only and does not take into account your personal financial, tax or credit position. It is not personal financial, tax or credit advice. Please speak with us, your accountant or another suitably qualified adviser before acting on anything in this article.
