Strong SME demand for Asset Finance

New data from the Commonwealth Bank of Australia shows small and medium businesses are preparing for the future, with equipment and machinery financing significantly up in the first six months of FY22 compared with the same period in FY21 (87 per cent) and pre-pandemic FY20 (86 per cent).

Over the six months to December 2021, demand for equipment financing was highest amongst small and medium businesses in South Australia, with lending up 198 per cent in the state. This was followed by small business owners in Victoria (181 per cent), West Australia (84 per cent) and New South Wales (53 per cent).

CBA’s Executive General Manager Business Lending, Grant Cairns, said: “The operating environment has been very challenging for businesses who have navigated protracted lockdowns, the Omicron wave and major weather events. While many have been cautious, we have seen strong demand for asset financing, largely driven by government incentives and businesses trying to manage supply chain disruptions. Businesses – both small and large – are now buying equipment and machinery months in advance in response to supply constraints.”

Mr Cairns said government incentives like the instant asset write off scheme, available until mid-2023, had provided a boost for Australian businesses. 

“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.

“That being said, while some businesses look to invest and grow, some are still struggling and we know the current flooding across Australia’s east coast is impacting many businesses. We want customers to know we have support measures available and we are here to help. We encourage our business customers to reach out to us, when they are ready to do so, to discuss their individual circumstances and what might be suitable for their needs.”

Mr Cairns said CBA has been working hard to deliver a range of fast lending solutions for businesses when and however they need it.  This includes fast access to funds via its innovative lending platform, BizExpress, and Stream Working Capital, which removes the need for traditional fixed assets such as property and provides cash flow using outstanding invoices.

For small business owners who have a home loan with CBA, the bank is making it easier for them to access financing for vehicles and equipment. CBA has simplified many of its Asset Finance processes to be able to recognise good payment history. This means small business customers can access up to $100,000 for business vehicles without the need to provide detailed financial documents.

Largest new lending growth (from July – December 2021) by asset type*:

• Prime Movers + 1667 per cent
• Moulding Machinery + 290 per cent
• Forklifts + 282 per cent
• Heavy trailers + 254 per cent
• Small Agriculture Equipment + 124 per cent
• Trucks + 98 per cent
• Excavators + 82 per cent
• Earthmoving equipment + 58 per cent

For more information visit, www.commbank.com.au/assetfinance or call 1800 ASSETS.

For more information on CBA’s support measures for those impacted by current flooding in Queensland and NSW, visit commbank.com.au/emergencyassistance.