Australian businesses have shifted things up a gear in 2021, with new asset finance figures revealing a 187% rise in light commercial vehicle purchases since January.
The spike in business vehicle financing was driven by sales of all classes of vehicles, no doubt partly due to SMEs making the most of the federal government’s temporary full expensing scheme (aka instant asset write-off) ahead of June 30.
Here’s a quick snapshot of the Commonwealth Bank’s (CBA) business financing figures by vehicle type:
- Light commercial vehicles increased 187%
- Utes and vans increased 85%
- Heavy trucks increased 50%
- New motor vehicles including passenger and SUVs increased 36%
“We’ve seen the federal government’s instant asset write-off scheme support many of our customers in the past year,” explains CBA Executive General Manager, Business Lending, Clare Morgan.
“There’s a general expectation that we’ll see an uplift in both financing and registrations of business vehicles as we approach the end of financial year.”
Hold up, what’s this temporary full expensing scheme?
Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.
It allows businesses, both big and small, to immediately write off any eligible depreciable asset until 30 June 2023 (recently extended from 30 June 2022 in the federal budget).
This can help improve your cash flow as it allows you to reinvest the funds back into your business sooner.
But here’s the catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.
If you’d like help obtaining finance to purchase/upgrade new equipment, get in contact with Shane Nipperess today. We work with a broad range of banks and would love to present you with financing options best suited to your business’s needs.
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