Businesses investing in new assets at record pace: CBA

Electrical engineer.

Though the current lockdowns pose a fresh batch of challenges for Australian businesses, investment in new assets has skyrocketed, with CBA data revealing that asset finance lending was up 20 per cent in FY21.

New lending volumes were also the highest recorded by CBA – 20 per cent higher than the median volumes recorded over the past ten financial years – with plenty of pent up demand likely to carry over into 2022.

“Pleasingly, despite the current lockdown restrictions in many of the states, we’re already seeing strong demand for asset finance in FY22,” said CBA group executive business banking, Mike Vacy Lyle.

“In saying that, we know this isn’t the case for all businesses, and ongoing uncertainty surrounding COVID-19 and lockdown restrictions are having an impact on some of our customers.”

Currently, the transport, construction and agriculture sectors made up the bulk of new asset finance commitments.

Over the year, the asset classes which saw the highest growth were aircraft and shipping (+150 per cent), earthmoving equipment (+120 per cent), agriculture (+50 per cent), motor vehicles and light commercials (+40 per cent), and trucks and trailers (+35 per cent).

Vacy Lyle said many businesses were capitalising on increased customer demand to “restock and invest in equipment upgrades, expansion of fleets, new fit outs or take advantage of technological advancements.”

“Each business has its own unique demands and opportunities that asset financing can support – from sole traders looking to secure loans for a new vehicle, to listed entities looking to acquire a business via an asset backed structured facility.”

If you’re looking for financing to purchase new equipment, make sure to browse our business loans comparison hub, where you’ll be able to weigh up offers from bank and non-bank lenders.

 

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