Friday, June 9, 2023

CBA data shows a surge in small businesses investing for future growth

Grant Cairns, Executive General Manager for Business Lending at CBA

Australia’s SMBs are investing in their recovery. With CBA financing for equipment, the sector is up 17% so far this financial year, compared with the same period last year. CBA research also shows 67% of businesses have budgeted for new equipment in the next 12 months, with 55% of those businesses specifically planning to invest in IT and office technology.

What are reasons behind the investment surge?

Grant Cairns, CBA’s Executive General Manager for Business Lending, said he expects the growing rate of investment to continue, underpinned by a range of incentives.

These include new interest rates from CBA for its SME Recovery Loans; the extension of the Federal Gov’t’s instant asset write off scheme to mid-2023, and new tax incentives announced in the Federal Budget to encourage SMBs to invest in technology and training.

The Federal Budget has measures that allow SMBs to receive a $120 tax deduction for every $100 they spend on training staff or investing in tech up to a maximum of $100,000 a year.

“Government incentives have played a significant role in lifting business investment over the past few years. Since July last year, we’ve seen continued growth in asset finance in the small business sector, with the instant asset write-off scheme providing a good reason for customers to upgrade equipment and technology,” Mr Cairns said.

“There is also the government-backed SME Recovery Loan Scheme available until 30 June this year, as well as  new government measures providing upfront deductions on digital infrastructure, so I expect we will see a continued uplift in small businesses investment.”

“We’re committed to supporting businesses to invest in the future. Last week we released new lower rates through CBA’s Gov’t-backed SME loan, the ‘Business Restarter Loan’ with rates from 3.29%, including flexible payment and security options and repayment holidays. We encourage businesses to speak to us about how we can help meet their business needs.”

What are SMBs specifically investing in?

SMBs have also been utilising CBA’s Energy Efficient Equipment Financing (EEEF) which rewards clients with a discount on financing for energy efficient vehicles, equipment and projects. Financing under CBA’s EEEF is up 13% so far this financial year, compared with the same period last year. Across the SMB sector, the largest investment boosts have been in:

  • Electric cars – 156%
  • Trailers – 312%
  • Forklifts – 395%

“As firms welcome employees back into offices, they are investing in new tech to attract and retain staff, and many are demanding sustainable business investments. We’ve seen an uptake in hybrid and electric vehicles, and investments across other assets like IT equipment.”

“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy efficient alternatives. Many of our customers are utilising our leasing solutions and we’re able to offer packages that help businesses get everything they need now, with the flexibility to add on and upgrade in the future,” said Mr Cairns.

“Working with our strategic partner Equigroup, we can help businesses convert leases and restore capital back for use in other areas, even if they have paid cash for their IT equipment.”