Asset finance loans grew by 20% in some sectors of the economy despite the pandemic, according to Commonwealth Bank.
CBA has released a report that suggests that, in the midst of Covid, key areas of new asset lending actually grew: aircraft and shipping was up 150%, earthmoving equipment went up 120% and agriculture rose 50%.
Even in the most established sectors of the asset finance industry, vehicles, growth was seen. New lending went up in motor vehicles and trucks and trailers, the staple of most asset brokers.
“While the operating environment has been challenging for many business for the last 18 months, we’ve seen some businesses in sectors like agriculture and manufacturing, restock and invest in equipment upgrades, expansion of fleets, new fit outs or take advantage of technological advancements,” said Mike Vacy Lyle, group executive Business Banking at CBA.
“Each business has its own unique demands and opportunities that asset financing can support – from sole traders looking to secure loans for a new vehicle, to listed entities looking to acquire a business via an asset backed structured facility.”
“We’ve seen many larger corporate and specialised agricultural customers take on asset backed facilities to upgrade plant and manufacturing sites or new greenfield projects.”
“Pleasingly, despite the current lockdown restrictions in many of the states, we’re already seeing strong demand for asset finance in FY22.”
“In saying that, we know this isn’t the case for all businesses, and ongoing uncertainty surrounding COVID-19 and lockdown restrictions are having an impact on some of our customers. We have a range of support measures available for those who need some help over the next few months.”
