A lender that specialises in asset and equipment finance has attributed its massive growth in SME loan applications to the federal government’s recently introduced tax relief incentive.
NLG Leasing’s recent analysis of its loan portfolio revealed a 400 per cent increase in loan applications to SMEs for the 12 months to October 2015.
The group said the rapid growth can be largely attributed to the government’s recent legislation that allows businesses with a turnover of less than $2 million to receive an instant tax deduction of $20,000 for the purchase of items relating to their business.
Frank Crombie, director of aggregation services at NLG Leasing, said the tax relief initiative also represents a significant opportunity for brokers, particularly when structuring the $20,000 business purchase through a lease or chattel mortgage.
“SMEs are continuously seeking alternate financing solutions,” he said. “Financing business goods through asset finance alleviates cash flow, whilst still enabling the benefit of the tax deduction.”
He added: “The acquisition through a leasing structure is a smart alternative that allows the reallocation of funds to other areas of the business that can have a positive effect on efficiencies, productivity, sales, and ultimately growth.”
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