Businesses are showing a greater confidence about borrowing money, in the wake of the May federal budget.
New figures show credit applications from businesses in the three months to the end of June rose 2.9 per cent compared to a year earlier.
Credit information provider Veda's quarterly business credit report showed the biggest increase was a 3.8 per cent rise in asset finance applications as small business took advantage of the budget's $20,000 instant asset write-off tax break.
It notes that the number of applications under $20,000 was double that of items greater than $20,000.
Veda's Moses Samaha says the budget and interest rate cuts by the Reserve Bank in February and May have helped business confidence.
The Veda business credit demand index has proven to be a lead indicator of how the overall economy is performing.
"Veda's data indicates a moderate pick up in credit demand by business, which is an encouraging sign given that growth in the Australian economy remains below trend," Mr Samaha said releasing the report on Thursday.
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