New research from CBA indicates that Australia’s small businesses are investing in their recovery, with 67 per cent of businesses having allotted their budget for the purchase new equipment in the next 12 months, 55 per cent of those businesses specifically planning to invest in IT and office technology.
CBA has revealed that its incvolvement in the financing for equipment and machinery across the small-business sector is up 17 per cent so far this financial year, compared with the same period last year.
Grant Cairns, CBA’s Executive General Manager for Business Lending, said that he expects the growing rate of investment to continue, underpinned by a range of incentives, including new interest rates for SME Recovery Loans, the extension of the Federal Government’s instant asset write off scheme to mid-2023, and new tax incentives announced in the Federal Budget to encourage small businesses to invest in technology and training.
The Federal Budget has included measures that allow small businesses to receive a $120 tax deduction for every $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,” Cairns said. “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.
“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,” Cairns added.
According to CBA’s data, small businesses have also been utilising their Energy Efficient Equipment Financing (EEEF) which provides customers with a discount on financing for energy-efficient vehicles, equipment and projects. Financing under CBA’s EEEF is up 13 per cent so far this financial year, compared with the same period last year.
“As organisations welcome employees back into offices, they are investing in new technology to attract and retain staff, and many are demanding sustainable business investments,” Cairns said. “We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets including IT equipment.
“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy-efficient alternatives,” he added.