How can it be May already? The last two years have been incredibly challenging and, to an extent, felt like time slowed down a bit….but life and business is bouncing back quickly and here we are nearly in the middle of May and fast approaching the end of the financial year.
It’s fair to say that we have never seen a market like this before. Even before the RBA increased the interest rate at their May meeting, rates were moving up every week, having increased for equipment and car loans by 2-3% across the board already in 2022.
It is at the point that funders are providing quotes, but within the week they will not honour them as their cost of funds have increased.
But given all of this, demand for finance is still very high as the economy appears to be bouncing back in most sectors. Funders have returned to their pre-COVID credit appetite and now offer a comprehensive suite of finance products. Even so, the are increasingly priced at a rate that is based around perceived risk.
The ongoing impact of the pandemic means that the market is still facing massive delays in the supply of new equipment, and vehicle, which has blown out to 12 months in some instances. This has led to a substantial increase in the value (and sale) of used assets. There are many examples of near new assets being more expensive than new as the purchaser simply can’t wait out the delivery timelines.
And adding to the pressure and stress on the market for new assets is the increase offered in tax deductions by the Federal Government by way of the Instant Asset Write-Off/ Accelerated Depreciation, with all purchases needing to be completed by 30th June 2023.
We are more than happy to help our clients work through some of these challenges and recommend you act early to secure the asset, so we can lock the rates away and settle quickly. If this is not possible and the equipment is delayed, we will work with the funder to ensure the approval holds to align with the delivery time.
Please don’t hesitate to contact us on 1300 731 131 so we can help.