Economic stability encourages small business to invest in assets

New research by East & Partners has found more than 50% of surveyed businesses delayed vehicle purchases by 6 to 12 months. Improved cash-flow outlook (56.5%) and a more favourable economic outlook (37%) were cited as significant factors influencing businesses to proceed with investment plans.

Renee Theodor, General Manager Asset Finance, CommBank, said earlier economic uncertainties had caused many businesses to delay investment decisions, particularly regarding vehicle and machinery purchases. "At the start of the year, there was a cohort of business owners who delayed decisions to invest in a vehicle or a new piece of machinery for their business because of concerns about the economy, geopolitical uncertainty, and continued cost-of-living pressures," Theodor said.

"However, we have seen momentum tick up over the past month, and I expect this to continue post the Federal Election, particularly with the end of financial year approaching and the extension of the Government’s $20,000 Instant Asset Write Off for another 12 months."

"While many businesses remain cautious, inflation is moderating, and CommBank economists maintain the base case view of more rate cuts this year," Theodor said. "The combination of easing inflation, clarity around the domestic political landscape, and tax-planning decisions before the financial year ends will likely encourage investment."

CommBank has introduced digital improvements to streamline financing for business vehicles and equipment, enabling faster access to funds for small and medium-sized businesses. Theodor emphasised that customers regularly report productivity gains through new vehicle or machinery investments, highlighting benefits like energy efficiency, automation, and speed.

Seamless service

Speed of approval and settlement is critical, according to 94.4% of business decision-makers surveyed by East & Partners. CommBank's enhancements include conditional pre-approvals for qualifying small business customers seeking finance up to $500,000, requiring no additional documentation.

Same-day approvals are available for eligible small businesses financing vehicles, vans, light trucks, and a wide range of machinery via CommBank's small business platform, BizExpress.

"Another improvement is instant, digital documentation for standard assets valued up to $1 million. This allows our bankers to generate documentation immediately after approval, enabling customers to complete financing documents digitally on the same day," said Theodor.

For brokers, CommBank has implemented virtual asset inspections through Redbook Inspect, improving turnaround times with high-quality digital reports and enhanced flexibility. "We’re investing in automation to reduce our turnaround times, ensuring faster approvals and funding for our customers," Theodor added.

Key considerations

For businesses evaluating financing options, several factors should be taken into account:

• Comparing financing structures: Loans and leases offer different advantages, with considerations including asset ownership, swap options over the loan term, and coverage of ancillary costs such as maintenance.
• Assessing cash-flow impact: Certain financing structures provide flexibility in repayments, allowing businesses to adjust payment amounts to align with cash-flow cycles. Features such as no upfront deposit financing can also help preserve working capital.
• Understanding end-of-term commitments: Some financing arrangements include balloon payments—large lump sums due at the end of the loan term. While this can reduce monthly repayments, businesses must plan ahead to accommodate the final expense.

As businesses continue to turn toward strategic investments for increased productivity, they are looking for economic partners that will remain adaptable in their financing solutions. Businesses are prioritising faster approvals, digital accessibility and improved efficiency, signalling that the future of financing for business vehicles and equipment sits in the ability to balance technological developments with targeted, customer-driven offerings.