Small businesses eye equipment finance providers

Recent research by East & Partners reveals small business are now engaging more with equipment finance providers.

The annual report based on over 1300 direct interviews found that equipment financing as a proportion of total borrowing has increased to 34.3 per cent for micro businesses and 27.9 per cent for SMEs.

However, equipment financing within the institutional segment makes up less ten per cent of total borrowings.

Corporates usage of novated leasing, finance and operating leases, chattel mortgage and commercial hire purchase products makes up 16.9 per cent of total borrowings, just over half that of micro businesses.

Head of markets analysis, Martin Smith, said micro businesses and SMEs were "increasingly seeking out equipment financing providers to acquire or replace plant and equipment vital to running their business or lifting productive capacity."
 
The report says that, although the largest finance providers, NAB and GE, struggled to maintain their growth trends over the 2014/15 financial year, both Westpac and CBA achieved "significant primary market share growth" over the same period.  

The corporate segment is the most competitive, with Westpac and NAB competing closely for market share leadership, while CBA and Macquarie both gained ground.

Although the Big Four remain the dominant providers at the institutional level, their cumulative market share decreased from 89.5 per cent to 86.8 per cent since June 2014.