New data from the Commonwealth Bank of Australia (CBA)’s business bank division has revealed a 15 per cent increase in vehicle and equipment financing compared to the same period last year.
These new findings corroborate recent research, which found that the majority of small businesses intend to invest in their operations in the next six months, despite the slow economy.
Areas of business investment
The research noted that businesses are investing more in shop and office fit-outs, with financing for shelving and furniture fittings up 25 per cent.
On a per-sector basis, financing activity has been particularly strong in areas like Health & Community services (up 35 per cent), Education, (up 24 per cent) and Manufacturing (18 per cent).
“Australia’s economic fundamentals are sound, and there are reasons for optimism about the future, but inflation and other global risks contribute to uncertainty that’s rightly prompting business owners to take steps to ensure their operations are future-fit and resilient,” said Grant Cairns, Executive General Manager Business Lending at Commonwealth Bank.
“While companies are navigating ongoing pressure from rising cost of doing business, we are seeing many business owners taking the long view on the economy and investing in their operations.”
Vehicles in vogue
Financing for light commercial vehicles such as utes, vans and light trucks – a category that is particularly popular with small business customers – rose by 27 per cent.
Motor vehicle purchases are considered a key driver for bank financing as supply chains continue to improve post-COVID and new stock becomes available. Within this category, loans for hybrid vehicles increased fivefold (533 per cent) in the past financial year, and electric vehicles were up 254 per cent.
It seems the CBA is banking on this new trend. Their report was released in conjunction with the launch of a new online and app-based car-buying service by Commbank in collaboration with Carsales.
