Customers are generally saying that they haven’t seen a material change in demand however on a positive note, they have seen an improvement in previous supply issues.

Some equipment suppliers have observed a few customers delaying orders for capital equipment although most expect that those orders will be re-activated in the very near future.

Government spending has come under scrutiny, and to date, the impact has mainly been restricted to the use of consultants however further cuts are expected.

Lack of housing and warehouse/factory space is a real issue which governments still haven’t worked out how to address. Removal of red tape and roadblocks would be a good place to start.

Interest Rates continue to be a blunt and ineffective weapon for the RBA. The pressure for further increases has reduced however a reduction in rates appears unlikely to happen in 2024.

Here are our observations for the coming year:

Commercial Finance Industry Update

Equipment and Commercial Finance

The major banks are continuing to narrow their finance offerings. Partly from the flow on effects of the Royal Commission, and partly from the reluctance of boards to expose themselves to anything with the slightest amount of risk.  The major banks are quickly reducing their share of the commercial and equipment finance markets.

Whilst the majors have decided to go more vanilla, behind the scenes these same banks are providing most of the funding to the Tier 2 and Tier 3 financiers who are quickly filling the gap; the non-bank financiers don’t come under the same APRA scrutiny.

The new status quo confirms that businesses get the best finance outcome by spreading their finances across multiple financiers and being selective in choosing the financiers which best suit each of the finance needs.

Protecting Your Security

Granting a financier a charge (GSA/AllPaaps) over your entire business is one of the most serious things you can do as a business owner and brings inherent risks to your business.  There are often better solutions.

We spend a considerable number of hours each week arguing on behalf of our customers for the removal of charges and release of property security.

Whilst it might be necessary to offer more security at some times in your business life cycle, our general position is:

1. Equipment Finance should not need property security or a charge over the company.
2. Commercial Property Finance should not need a charge over the company and should not be linked to Residential Property.
3. Working Capital Finance should not be linked to Commercial or Residential Property.

If you are using one bank, they will try and capture everything as security. Internally they call this “Whole of Wallet” lending.

Talk to us about a review of your Security Position.

Working Capital Finance

Cash continues to be king.

Customers continue to drag out payments, suppliers ask for quicker payment terms, supply chain issues haven’t fully gone away, and the ATO is becoming more onerous.

The Fintechs are becoming increasingly important, however beware of the fine print.

There is an increasing range of options available to provide businesses with working capital solutions. Talk to us about the available options: Commercial Loans, Overdrafts, Trade Finance, Debtor Finance and more.

Here are some of the resources we have available to help you and your business over the next year

R&D Tax Incentives

It’s important to have the right experts involved in handling your R&D Tax Incentives. Experts who can simplify the process and significantly increase your return.

The 30 April deadline is looming to register eligible R&D activities undertaken during FY23. The FY23 year is important due to the favourable interaction between the now expired Temporary Full Expensing of depreciating assets and R&D Tax Incentive Rebates.

Speak to us now if you need an introduction to an R&D Tax Incentive expert.

The ATO is cracking down on ATO Arrears

As we’ve always said, ATO arrears have a negative impact on obtaining competitive financing. Now it’s more important than ever that your business is up to date with ATO commitments:

• As of July 1st 2025, it will no longer be possible to deduct the interest charged on an overdue debt to the ATO.
• The ATO is now warning businesses with tax debts exceeding $100,000, and that are more than 90 days overdue, that they are now at risk of having their debt disclosed to credit reporting agencies.

Speak to us about strategically structuring your Working Capital Facilities to ensure you have access to the most competitive financing available.

Government Grants

Government grants continue to be available from both the Federal and State Governments. Old Grants change and new grants become available throughout the year. Securing Grants can provide a huge bonus to businesses; however, it needs a strategic and long-term approach to achieve the best outcomes.

Make sure you are engaging with the right experts to help you work through the process. Please let us know if you need an introduction to a suitable expert.

Strategic Finance Review

We offer our customers a strategic review of the finance solutions and security which you currently have in place. The outcome is a long-term strategic approach to implement the best finance solutions with the least amount of security.