Reflecting on 2025, and what businesses can expect throughout 2026

In our first post of the year, we reflect on what shaped business and commercial finance over the past year, and what those trends mean for 2026.

2025 Equipment Investment Trends and the Shift Toward Automation in 2026

ABS data shows equipment investment was soft through the first half of 2025, before a sharp rebound in the September quarter. However, the underlying trend remained modest, suggesting businesses were still cautious on major equipment purchases.

Despite the modest equipment purchasing trends, labour costs remain elevated and skilled labour is still hard to find, especially across construction, manufacturing and logistics. We expect these labour related challenges to be a key driver in increasing demand for automation and industrial machinery in 2026.

Automating production lines and core processes is expected to be a key focus for many small and medium-sized Australian businesses in the year ahead. Advancements in automation and technology are making industrial machinery purchases more accessible, and securing these assets via finance can be a strategic way to preserve cash flow whilst achieving an immediate return on investment.

Larger multinational businesses continue to lead the way with large scale automation strategies aimed at reducing their reliance on labour. The following article is an interesting read and highlights how Amazon expects to avoid hiring more than 160,000 people in the US by 2027 thanks to their investment in automation.

Read the full article here.

Our Outlook for 2026

The outlook for 2026 appears more stable relative to 2025. However, inflation is likely to remain toward the upper end of the RBA’s target band, with housing, utilities, health, insurance and financial services continuing to be sticky and showing little prospect of material improvement in the year ahead.

Interest rates are likely to have settled at the new long-term norm. The prospect of significant reduction in rates is unlikely without a collapse in the economy and high unemployment, which remains improbable while labour shortages persist.

Global trade conditions have improved modestly, with tariff concerns from the US and China easing following the introduction of a 10% US tariff framework and the removal of most short-term punitive tariffs on Australian exports by China.

The Australian media is likely to be distracted by the recently announced Bondi Royal Commission over the coming year. Hopefully it will bring about the necessary changes. However, having seen the Banking Royal Commission circus, we have our doubts.

With the above in mind, we can expect economic conditions in 2026 to be more predictable than 2025, with less expected disruption. For many businesses, this stability is likely to support more confident planning around capital expenditure, automation, and long-term investment.

ASIC’s Review of the Vehicle Finance Industry

The car finance sector has been a hot topic recently, with ASIC launching a review into the industry to address concerns raised around loans being offered predominantly by dealerships. ASIC’s review is focusing on loan structures, excessive fees and ensuring customers understand the finance options presented to them.

We always encourage our clients to speak with us every time they receive a finance quote from a car dealership. We can help with working out the true interest rate, which isn’t always what the dealers advertise, and can highlight other key areas to consider such as the fees and conditions.

Payday Super Changes

A reminder that Payday Super is legislated to start 1 July 2026 and if you haven’t already done so, you need to have processes in place to pay superannuation contributions at the same time as wages, instead of quarterly.

We are here to support your business.

Please speak to us about all things finance. Whether it be Equipment and Automotive Finance, Working Capital Finance which includes Debtor and Trade Finance, Property Finance including Construction Finance, Insurance Premium Funding. And yes, we also do Home Loan Finance.

We know that banks are becoming more selective and treating business customers worse than ever – please make us your first point of contact every time – we will get you a better outcome with a far better experience.