Small businesses are investing in their recovery as data reveals that financing for business equipment and machinery has increased.
Data released by the Commonwealth Bank of Australia reveals that there has been 17 per cent growth (compared to the same period last year) in asset financing for equipment and machinery amongst small businesses as they prioritise recovery and future growth.
The research illustrates that 67 per cent of businesses budgeted for new equipment in the next year, with 55 per cent of those specifically planning to invest in IT and office technology.
CBA’s Executive General Manager for Business Lending, Grant Cairns, said he expects the increase in investment to continue, which is fortified with a range of incentives coming from lenders and the government.
The Federal Budget included measures that allow small businesses to receive a $120 tax deduction for each $100 they spend on training staff or investing in technology, 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.
The largest asset growth across the small business sector has been in the following:
– Electric cars – 156 per cent
– Trailers 312 per cent
– Forklifts – 295 per cent
Mr Cairns said that there has been an uptake in the purchase of hybrid and electric cars as business staff request more sustainable business investments. To attract and retain staff there has also been an investment in other assets such as new technology and IT equipment.
“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy efficient alternatives,” said Mr Cairns.