SMEs looking to increase asset investment, CBA data reveals
Small businesses are planning to increase their asset investment and operations despite a slower economy, according to new data from the big four bank.
Recent data from the Commonwealth Bank of Australia (CBA) has indicated SMEs are continuing to increase their operations despite challenging economic conditions.
CBA revealed a 15 per cent uplift in vehicle and equipment financing compared to the same period last year.
CBA executive general manager of business lending Grant Cairns said though economic conditions remain tough, there is reason for business optimism.
“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,” he said.
“While companies are navigating ongoing pressure from rising cost of doing business, we are seeing business owners taking the long view on the economy and investing in their operations.”
Research highlighted motor vehicle purchases have increased by 55 per cent, which can be attributed to the improvement of supply chains post-COVID-19.
CBA said within this category, loans for hybrid vehicles have increased “fivefold” by 533 per cent in the past financial year.
Loans for electric vehicles have also substantially increased by 254 per cent.
Financing for light commercial vehicles such as utes, vans and light trucks also rose by 27 per cent due to their popularity with small business customers.
According to CBA, financing for shelving and furniture fitting is also up by 25 per cent as businesses invest in shop and office fitouts.
SME financing has also increased by 35 per cent in health and community, 24 per cent in education and 18 per cent in manufacturing.
CBA said to aid small businesses in their drive towards increased investment, they have collaborated with Carsales to launch a car-buying service for SMEs.
“CBA wants to help make finding and financing a car or electric vehicle easier for both business owners and individuals as motor vehicles are one of the most common asset investments for SMEs,” the bank said.
Cairns said it is important for the bank to remain focused on ensuring access to capital to help drive productive capacity across Australia.
“For small and medium-sized businesses, this means making it simpler and easier to access funds and we’ve cut our funding time-to-decision by 20 per cent to provide that support faster,” he said.
“We have been proactively reaching out to hundreds of thousands of our business customers to check in on them and ensure that those who need support know how to access it and understand what measures are available and that we’re here to help.”
CBA said the bank has worked to automate and digitise its business lending products, including business overdrafts now available to eligible small businesses.
This can be done via an automated online application process that can allow funds credited to an account in as little as eight minutes, according to the bank.
Cairns said the bank has taken this initiative to help SMEs looking to invest, although some are still finding it difficult in the current economy.
“While there are these pockets of strength and optimism across the economy, we know that the economic climate is challenging some businesses more than others and we have tailored support available for those who are doing it tough.”
