National Australia Bank's head of business banking has painted an upbeat picture of the economy in 2014, saying there are growing signs clients will lift their borrowing as the global outlook improves.
With the weaker Australian dollar supporting many high-employing industries, the boss of the country's biggest business banking division, Joseph Healy, said there were plenty of reasons to be confident about a long-awaited rise in borrowing.
However, the bank has not yet experienced an increase in business credit demand, making the next few months critical.
Before NAB's annual meeting on Thursday, Mr Healy said there were "quite encouraging" signs of increased interest from customers, which the bank hoped would carry into the new year. "I'm more confident today than I have been for quite some time," Mr Healy said in an interview.
Business leaders' concerns about political uncertainty had receded since the federal election, while the signs of improvement in Britain and the US were "very positive".
Whether this translated into more borrowing would be heavily influenced by the next few months.
"A lot's going to depend on this critical holiday season and how much money the consumer will spend," Mr Healy said. "There are so many businesses around the country, whether it's retailing or leisure or tourism, that the holiday season is make-or-break."
The comments come after Westpac last week said business credit growth had been at the lower end of its expectations.
Minutes from this month's Reserve Bank board meeting, published on Tuesday, were also cautious about the long-awaited baton change from mining investment to other sectors.
"Mining investment was likely to decline over the next few years and while other areas of business investment could be expected to increase from current very weak levels, that would take time," the minutes said.
Official figures also show business credit grew by just 1.4 per cent in the year to October, much more slowly than mortgage lending.
However, it has become a key target area for the big banks, who are betting companies will soon start taking on more debt.
ANZ Bank is said to be competing fiercely for new customers, while Westpac also wants to take on NAB as the country's biggest lender to business.
Mr Healy said the extra competition had squeezed profit margins in the segment and caused some to loosen their lending standards.
"When I look at the margins on new business in the market today compared to similar business from, say, a couple of years ago, then the margin difference can be between 20 and 30 basis points," he said.
Despite this, NAB's 2.5 per cent profit margins on business lending are notably wider than its margins in retail banking, and analysts say the bank will be in a prime position to capitalise on any rebound in borrowing by businesses.