Investment in Equipment Supporting Business Growth
More businesses are focusing on investing in equipment as a means for growth, new research suggests. Equipment suppliers can help this growth by offering equipment finance.
Looking at the way businesses choose to grow makes for interesting reading.
Do they expand by purchasing new real estate properties, or by developing their existing ones to accommodate more capacity and potential? Do they grow their human resources through recruitment drives and staff training? Or should they focus on getting their existing physical resources up to scratch by investing in new equipment?
It could be that the record-low cash rate encourages more organisations to invest in property assets over their equipment - although interestingly, that's not what recent Australian Bureau of Statistics (ABS) research shows.
Looking at the ABS findings, capital expenditure on buildings has gone down while on equipment finance has gained a new lease of life in FY15.
The hard facts
Between the June quarters of 2014 and 2015, building and structure investments (as a seasonally adjusted figure) fell by 16.7 per cent - though expenditure levels for that period still met almost $21.7 billion in value. Even compared to the March quarter, Q2 building expenditure dropped 5.6 per cent.
Conversely, despite a fall in the June quarter, equipment purchases have gone up by 2.8 per cent in the past year, with expenditure for the June quarter totalling more than $12.6 billion nationwide.
There are numerous reasons why this might be, though quite clearly businesses are aiming to get the most out of their existing properties by investing in the equipment they need to set them apart.
Perhaps buoyed by an inflated property market in certain Australian capital cities, it could be that optimising their space and resources is a smart move in the long run for businesses. However, all substantial purchases are tricky to balance with cash flow, which is where equipment finance comes in handy for equipment suppliers.
Are your clients seeking finance?
There are many ways that providing timely equipment finance as an equipment vendor can help you help your clients. In essence, their success is yours, and you can support them in the way they want to grow by helping them afford it.
As a finance provider with versatile vendor finance solutions, Classic Funding Group can help equipment suppliers to focus on what they do best, while we focus on providing clients with the finance expertise and support that they need.
If ABS data is anything to go by, the iron could be hot and ready to be struck sooner rather than later. Get in touch with one of our experts to hear how we can help.