Australian small businesses are investing in their recovery through a surge in machinery purchases, IT and office technologies, and sustainable business assets, according to Commonwealth Bank (CBA) data.
The CBA research shows small business financing for equipment and machinery is up 17% so far this financial year compared to last year.
The 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.
“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,” explains Grant Cairns, CBA’s Executive General Manager for Business Lending.
Businesses going green
Across the small business sector, the biggest investment boosts have been in electric cars (156%), trailers (312%), and forklifts (395%).
According to CBA’s data, an increasing number of small businesses are taking advantage of discounts on financing for energy-efficient vehicles, equipment and projects.
“We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets including IT equipment,” he adds.
“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy-efficient alternatives.”
What else is stimulating the growth?
Mr Cairns says the growing rate of investment is underpinned by a range of government incentives.
That includes attractive interest rates for the SME Recovery Loan Scheme; the extension of the federal government’s temporary full expensing scheme (aka instant asset write off) to mid-2023, and tax incentives announced in the federal budget that encourage small businesses to invest in technology and training.
Those tax incentives 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,” says Mr Cairns.
“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.”
Get in touch now ahead of the new financial year
To make the most of the government incentives outlined above, it’s important to get the ball rolling now.
For example, the government-backed SME Recovery Loan Scheme is only available until 30 June this year.
And to make the most of temporary full expensing (aka the instant asset write-off) this financial year, the asset you purchase must be installed or ready for use by 30 June.
So if you’d like to explore your finance options for purchasing an asset for your business, as well as any government schemes or energy-efficiency discounts your business might be eligible for, get in touch today.