Small Businesses Investing in Equipment
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.
Across the SMB 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,” explains Grant Cairns, CBA’s Executive General Manager for Business Lending.
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.
“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” says Mr Cairns.
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