SMEs continue to invest in machinery

It also revealed that 67 per cent of businesses budgeted for new equipment in the next 12 months, with 55 per cent of those businesses specifically planning to invest in IT and office technology.

Government incentives such as the instant asset write-off scheme, extended until mid-2023, new tax incentives to encourage small businesses to invest in technology and training and new interest rates from CBA for its SME recovery loans have played a “significant role” in lifting business investment, Grant Cairns, CBA’s executive general manager for business lending said.

Mr Cairns said he expects the growing rate of investment to continue.

“There is also the government-backed SME Recovery Loan Scheme available until 30 June this year, as well as new government measures providing upfront deductions on digital infrastructure, so I expect we will see a continued uplift in small businesses investment,” Mr Cairns said.

The federal budget included measures that allow small businesses to receive a $120 tax deduction for every $100 they spend on training staff or investing in technology up to a maximum of $100,000 a year.

Mr Cairns said the CBA was committed to supporting businesses to invest in the future.

“Last week we released new lower rates through CBA’s Government-backed SME loan, the ‘Business Restarter Loan’ with rates from 3.29 per cent, including flexible payment and security options and repayment holidays,” he said.

Financing for electric vehicles

The data also saw an uptick in small businesses investing in electric vehicles.

CBA’s data found financing for its Energy Efficient Equipment Financing (EEEF), which rewards customers with a discount on financing for energy-efficient vehicles, equipment and projects, was up 13 per cent this financial year, compared with the same period last year.

Across the small-business sector, the largest investment boosts were in electric vehicles (up 156 per cent), trailers that rose 312 per cent and forklifts saw a rise of 395 per cent at March 2022, compared with the same period the previous year.

“As organisations welcome employees back into offices, they are investing in new technology to attract and retain staff, and many are demanding sustainable business investments. We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets including IT equipment,” Mr Cairns said.

“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy efficient alternatives.

“Many of our customers are utilising our leasing solutions and we’re able to offer packages that help businesses get everything they need now, with the flexibility to add on and upgrade in the future.”

[Related: High demand for asset finance]