NAB data shows that small business equipment finance loans have jumped 341% in value over the past two years.
The big bank attributes this to farmers, as the financing of agrifood equipment increased by 33% from September 30, 2019 to September 30, 2021.
Tractor financing is also up 69% in the same period, and Julie Rynski, NAB’s regional and agri-food director, said Australia’s winter crop production would hit a record 58.4 million tonnes .
“[This is] even with floods causing losses and downgrades in several production regions, ”Ms. Rynski said.
“The area devoted to summer crops in 2021-2022 is expected to increase by 36% to reach 1.4 million hectares.
“Farmers are also encouraged by the Instant Asset Write-off program, which was significantly expanded in the 2020-2021 Federal Budget to $ 150,000, primarily as a COVID-19 stimulus.
“In the 2021-2022 federal budget, the program was extended for one year until June 30, 2023, giving agribusinesses a longer window of opportunity to make on-farm investments. “
NAB funding for trucks and trailers has increased by 40% over the past two years, while funding for construction equipment such as cranes and earthmovers has increased by 39%.
“This reflects the ongoing migration of many residents of the capital to regional Australia, which is great news for regional communities and their local economies,” said Ms Rynski.
“Overall regional net migration increased a further + 14% in the quarter through September 2021, according to data released by the Regional Australia Institute.”
Widely untapped SME loan program extended
Earlier this week, the Morrison government announced that it was extending the SME payback loan program for an additional six months until June 2022.
To date, around 80,000 loans worth around $ 7.3 billion have been taken out under the program since its launch in March 2020.
That’s well below initial estimates, as the government in 2020 has allocated up to $ 40 billion to the program.
The program enables small businesses with sales of less than $ 250 million to access loans of up to $ 5 million for terms of up to 10 years.
However, in the last cycle, the government reduced the loan guarantee from 80% to 50%.
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Rates based on a $ 30,000 loan for a five-year term. * Disclaimer: This comparison rate is only true for this example and may not include all fees and charges. Different terms, fees, or other loan amounts may result in a different comparison rate. Rates are correct as of December 17, 2021. See disclaimer.
Pictured: Mogul Brahman Stud manager Glen Pfeffer. Photo by Harrison Astbury
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