A surge in company liquidations is looming as more firms are default on their debt.
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Data from the credit reporting bureau Centrix shows commercial defaults rose by 6 percent over the June quarter to 1,700, with the average default at about $4000.
"Defaults have been trending up for some period of time now, and they continue to trend up, and I think they will continue in the near term as well," Centrix's managing director Keith McLaughlin said.
"I think that's a sign there is a some stress, particularly in the SME (small and medium enterprise) market, and that is an alarming issue for me looking forward."
He said many smaller firms were experiencing cash flow issues.
"Even whilst that hasn't yet flowed through into company liquidations, there's always a lag between companies starting to slip up on the payments and go into arrears, and then into default and then going to into liquidation."
McLaughlin said it sent a signal that liquidations might rise as well, although an 8 percent increase in business closures over July, had been largely voluntary, and not because firms were insolvent.
He said despite the concerns, the general business environment appeared to be positive, with new company registrations rising by 5 percent over July.
The experience of consumers in the credit market stood in stark contrast to that of businesses.
The number of accounts reported to be in arrears fell 5 percent, while those accounts in hardship dropped 7 percent month-on-month, to 11,250.
About a third of these were mortgages, 30 percent were credit cards and a quarter were personal loans.
"All the signals are very strong for consumer credit," McLaughlin said.