Leasing finance is tipped to replace lost dollars for some brokers as residential lending slows and lender commission cuts squeeze revenue.
“With residential lending really quietening down, more and more brokers are looking to diversify,” David O’Toole, national sales manager of commercial and equipment finance with aggregator FAST, said. “And a lot of those brokers are looking to equipment financing.”
Commercial and equipment financing contributes around $2 billion every year to FAST’s loan book.
Despite increased broker interest, Mr O’Toole said recent economic conditions had reduced consumer demand for leasing finance products.
“In comparison to home loans, equipment finance sells up well, but it has quietened down of late as a result of economic uncertainty, high interest rates and low consumer confidence,” he said.
Despite the recent slowdown Mark O’Donoghue, founder and principal of Finlease, said that the sector was set for a rebound.
ABS figures have revealed a rise in leasing finance however O’Donoghue said this was largely representative of annual end-of-financial-year activity. Nevertheless, he said conditions for leasing finance were positive.
“Interest rates are looking to come down and consumer confidence is improving,” Mr O’Donoghue said.
“It feels as though we are just starting to turn a corner now and we have positive – but cautious – expectations for the period ahead,” he said.
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