As the end of year fast approaches, many Australian businesses are likely thinking of how they can ramp up for growth in the next year. For a large part of the market, they would likely be lining up asset or equipment purchases right now – whether it’s a construction company in need of a new excavator, a farm installing an irrigation system, or a dental practice upgrading its X-ray machine.

Asset finance brokers continue to play a crucial role in providing access to the capital that makes these purchases happen. So, how is the market shaping up?

Will Hamer, managing director at brokerage Hamer Asset Finance, says activity has been strong, particularly given the cautious approach adopted by some businesses at the end of financial year (traditionally a prime period for asset finance).

“On the ground, we’re still seeing plenty of heavy equipment being purchased – businesses are backing income-generating assets even in a cautious market,” Hamer says.

On the ground, we’re still seeing plenty of heavy equipment being purchased – businesses are backing income-generating assets even in a cautious market”
- Will Hamer, managing director, Hamer Asset Finance

“That said, the lead-up to EOFY was a bit of a fizzle. I’d put that down to weaker incentives for businesses to pull the trigger on asset purchases, which left the landscape feeling a bit flat.”

Uncertainty and opportunity

Several factors cooled the asset finance market earlier this year, not least the uncertainty of a federal election. Each party went to the polls with different positions on the instant asset write-off.

Labor pledged to extend the $20,000 scheme into the 2025–26 financial year, while the opposition promised to make it permanent and lift the cap to $30,000.

Meanwhile, mixed economic conditions – from tariff speculation to cost-of-living concerns – may have also prompted some businesses to delay or scale back machinery, vehicle, and equipment purchases in the first half of the calendar year.

Capital expenditure on equipment and machinery fell 2.1 per cent year on year in the three months to 30 June 2025, according to the latest Australian Bureau of Statistics (ABS) data, with the $20.3 billion spend marking the third consecutive quarterly decline in trend terms.

But since then, sentiment has been improving, and interest rates have fallen further.

Hamer states: “In the asset finance space, we’ve seen rates ease off a little, but the major banks are mostly holding steady. My take is we’ve still got another 6–12 months of this ‘wait and see’ approach before fixed asset rates really shift.

“What’s interesting is that some of the non-bank and second-tier lenders have started dropping rates more aggressively to win market share, and they’re definitely nipping at the heels of the big banks.”

Amanda Alderson, a finance broker at Queensland-based brokerage Dealer Direct Finance, says the big banks have also tended to be more selective.

“They are focusing on customers with strong cash flow, stable trading history, and assets with solid residual value. This means deals are no longer ‘one size fits all’. Clients need tailored structures and clear strategies to demonstrate resilience,” she says.

“As brokers, our role is to bridge the gap – packaging applications to highlight strengths and ensuring clients are positioned as the kind of borrowers banks want to support.”

The broker opportunity

So, what do the next 12 months in asset finance look like?

Alderson says she’s currently seeing a strong appetite in civil equipment, transport and logistics fleets, and agribusiness machinery.

“These sectors are backed by stable pipelines of work and long-standing operators,” she says.

“In parallel, there’s growing momentum in sustainable assets – from electric vehicles to hybrid machinery – as businesses future-proof operations and respond to client expectations.”

Moving forward, she believes flexibility and sustainability will likely be two standout themes.

“Lenders are rewarding businesses that embrace structured options like balloons, seasonal payments, and sale-leasebacks,” she says.

“At the same time, there’s a noticeable rise in demand for green and low-emission assets, with banks and non-banks increasingly incentivising this shift.

“Digital platforms are also speeding up approvals and giving clients faster access to capital, which aligns with our focus on innovation and efficiency at Dealer Direct Finance.”

Brokers are in the driving seat to help clients make the most of these trends.

Speaking on The Adviser’s In Focus podcast in June, Mark Rayson, head of asset finance aggregator COG Aggregation, said building deep relationships with clients can be an effective way to cope with variances in demand between the boom times and quieter periods.

“It’s not just going, ‘You need a truck today, I can get you a truck’. It’s understanding what [they’re] going to need over the next 12 months,” he says.

“You might have a completely different strategy, knowing someone’s going to purchase five trucks over the next 12 months and half a dozen trailers or whatever it may be.”

With this approach, it’s always a good time to be a broker who can write asset finance.

“Interest rates appear to be coming down. [And] we expect to see more demand in the industry,” he says.

“The early bird gets the worm. When it’s booming, it’s almost too late to jump in.”