Demand for Asset Finance continues to grow

May 18, 2021

Demand for Asset Finance continues to grow

May 18, 2021

Demand for Asset Finance continues to grow

A rebound in asset finance demand has halted the overall decline in business credit demand

Figures released from the data analytics and credit reporting company have shown that business credit demand has returned to the same level as the March 2020 pre-pandemic quarter before the border closures and lockdown measures caused by the pandemic.

The auto industry primarily drove the demand for asset finance (up 25.0%). Demand for asset finance has significantly increased in the construction industry, where inquiries rose by 10% in the March 2021 quarter; the data showed many businesses investing into yellow goods.

Equifax’s Quarterly Business Credit Demand Index for March 2021 – which measures the volume of credit applications for trade credit, business loans and asset finance – revealed that the recovery in business credit demand was driven by a bounce-back in asset finance, which was up 8.9% in the March 2021 quarter, compared with the data from a year ago (pre covid crash)

 Boost for Asset Finance demand driven by Incentives

Commenting on the bounce in demand for asset finance, Equifax general manager commercial and property services Scott Mason said: “The expansion of the instant asset write-off scheme has also encouraged businesses to bring forward their spending on new assets, knowing they can claim a tax deduction up front for the full value of the purchase.”

“To see a rise in asset finance demand is a good sign for the economy, demonstrating that businesses are starting to once again spend on replacement and renewal of equipment. The construction industry is a big user of asset finance, and this is the second quarter in a row that applications have risen as the industry seeks to scale and grow.”

It’s great to see that confidence is returning to the Australian market. SME’s, now is a fantastic time to purchase assets to help your business expand as the data suggests that the Australian economy will continue strong growth in the near future.  To discuss any of your unique business scenarios further, please contact us.

Source: The Adviser

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