One of the best ways to build a successful business is to keep investing and planning for the future, even when things are going well. And, as life returns to normal post-Covid-19, many small and medium businesses in Australia are putting that strategy into practice. A growing number of businesses are buying equipment and machinery months in advance, with demand for asset finance topping previous records. And it’s only likely to continue as more SMEs look to progress in 2022. Find out more here.
Data released by The Commonwealth Bank of Australia shows a record number of asset loan applications in the last six months, largely driven by government incentives, such as the “instant asset write off” scheme and businesses offsetting supply constraints.
Over the six months up until December 2021, demand for asset financing was highest amongst small and medium businesses in South Australia, closely followed by Victoria, West Australia and New South Wales.
CBA’s Executive General Manager Business Lending, Grant Cairns, said: “After the government extended the instant asset write off scheme last year, we saw a big uplift in financing for vehicles and equipment and expect this to continue into 2023. The government-backed SME Recovery Loan Scheme is also available until 30 June 2022 and is an excellent initiative to ensure more businesses can access low lending rates on flexible terms.”
“The Australian economy is looking strong in 2022 and, with expectations that demand will increase, we anticipate continued investment in capital goods to fuel future growth.”
Financing for SME equipment
Asset financing plays a pivotal role in helping drive business growth. For a small business just starting out or those with limited resources, physical assets, equipment and vehicles are a significant cost to outlay initially. But, if they are an essential part of business operations, delaying the purchase means the business is unable to perform and generate an income.
One of the key advantages of asset finance is that it allows the business to buy assets without committing capital, helping fund growth without increased risk. What’s more, asset finance means the business is able to spread the cost of an asset over its lifespan.
With this type of financing, the asset being financed is generally used as security in the lending process. Asset finance can be used to finance any asset that is seen as a significant investment in a business and that will have a reasonable lifespan, such as:
- Heavy Machinery
- Farming Equipment
- Company Vehicles
- Mining Equipment
- IT Equipment
- Kitchen Fitouts
Get expert advice about asset finance
With a number of asset financing providers available to SME businesses in Australia, it’s important to find the right finance solution to fit your business’s needs. Talk to a financial specialist about your options for financing business equipment, machinery or vehicles, and get expert advice about asset finance.
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