Earthmoving equipment was one of the biggest contributors to increased business lending during the past financial year, Commonwealth Bank says.
Lending for earthmoving equipment soared by 120 per cent during the 2020-21 financial year, only surpassed by lending in the aircraft and shipping sector.
The bank’s data found overall business asset finance lending during the financial year was 20 per cent higher than the medians recorded over the past decade.
When focusing solely on corporate and specialised agri businesses, lending for earthmoving, mining and construction assets increased by 270 per cent, the bank’s data found.
One factor contributing to this has been an extension of the Federal Government’s instant asset write-off scheme and Commonwealth Bank’s group executive of business banking Mike Vacy Lyle says these government tax incentives, plus increased customer demand, has contributed towards businesses looking to invest and grow.
“While the operating environment has been challenging for many business for the last 18 months, we’ve seen some businesses in sectors like agriculture and manufacturing, restock and invest in equipment upgrades, expansion of fleets, new fit outs or take advantage of technological advancements,” he says.
“Each business has its own unique demands and opportunities that asset financing can support – from sole traders looking to secure loans for a new vehicle, to listed entities looking to acquire a business via an asset backed structured facility.”