Surge in small businesses investing for future growth: CBA data

The Commonwealth Bank has reported that financing for equipment and machinery across the sector is up 17 per cent so far this financial year and that 67 per cent of businesses have budgeted for new equipment in the next 12 months, with 55 per cent of those businesses specifically planning to invest in IT and office technology.

Grant Cairns, CBA’s executive general manager for business lending, said he expects the growing rate of investment to continue, underpinned by a range of incentives, including new interest rates from CBA for its 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 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. 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.

“We’re committed to supporting businesses to invest in the future. Last week we released new lower rates through CBA’s Government-backed SME loan, the ‘Business Restarter Loan’ with rates from 3.29 per cent, including flexible payment and security options and repayment holidays. We encourage businesses to speak to us about how we can help meet their business needs.”

According to CBA’s data, small businesses have also been utilising CBA’s Energy Efficient Equipment Financing (EEEF) that rewards 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.

Across the small-business sector, the largest investment boosts have been in electric cars (156 per cent), trailers (312 per cent), and forklifts (395 per cent).