CBA data shows the instant asset write-off scheme is benefiting the financial growth of prime movers
New data from the Commonwealth Bank of Australia (CBA) shows prime movers are experiencing the largest new lending growth courtesy of the Federal Government’s extended instant asset write-off scheme.
CBA figures show prime movers had a growth of 1667 per cent as small and medium businesses hold an increased demand for equipment and machinery financing from July to December 2021.
This coincides with the extension of the instant asset write-off scheme by the Federal Government, which is now available until mid-2023.
Forklifts (282 per cent) and heavy trailers (254 per cent) both had high lending growth, but prime movers was far and away the asset that has had the highest increase in demand in the second half of 2021.
The data shows South Australia was the state with the highest demand for equipment financing in 2021, with lending increasing to 198 per cent. Small business owners in Victoria (181 per cent), Western Australia (84 per cent) and New South Wales (53 per cent) also had a rising need for equipment financing, particularly in prime movers.
CBA’s data suggests the demand for prime movers as an asset write-off item is significantly higher in the second half of 2021, especially when compared with the same period of the 2021 and pre-pandemic 2020 financial years.
CBA executive GM business lending, Grant Cairns says businesses are planning for the future by investing in equipment and machinery.
“While many have been cautious, we have seen strong demand for asset financing, largely driven by government incentives and businesses trying to manage supply chain disruptions,” Cairns says.
“Businesses – both small and large – are now buying equipment and machinery months in advance in response to supply constraints.”
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“After the government extended the instant asset write-off scheme last year, we saw a big uplift in financing for vehicles and equipment and we expect this to continue into 2023,” he says.
The CBA says small business customers can access up to $100,000 for business vehicles without needing to provide detailed financial statements.