Businesses feeling bullish | Business loans back on track | Twelve Grains Capital

Business finance interest rates fall to record-low levels

Getting a business loan to buy a new asset or finance expansion has never been cheaper, according to data from the Reserve Bank of Australia and APRA. Interest rates for business loans fell about 1 percentage point between September 2019 and September 2020. As always, size matters, with the average big business paying about 3 percentage points less in interest than the average small business.

Here are five reasons why now might be the perfect time to take out a business loan:

  • Interest rates are at record-low levels

  • Lenders are keen to finance viable businesses

  • Business confidence is above pre-Covid levels

  • The economy is growing and unemployment is falling

  • The instant asset write-off was raised last year to $150,000

We can help you get a business loan

Australian businesses in bullish mood

Business confidence has reached its highest level in almost three years after enjoying a record-breaking surge. In December 2020, the Roy Morgan Business Confidence index jumped 14.1 points to 123.2, which was the highest monthly reading since January 2018. More remarkably, confidence jumped 37.6 points from September to December – the biggest quarterly increase in the survey’s history. Business confidence is not only above pre-Covid levels – it’s also above the long-term average of 113.4 points. Business confidence is now positive (above 100) in five of the six states:

  • NSW = 128.2 points

  • VIC = 124.1 points

  • WA = 122.8 points

  • QLD = 117.0 points

  • SA = 101.4 points

  • TAS = 88.7 points


Toyota HiLux, Ford Ranger and Toyota RAV4 selling in droves

Sport utility vehicles (SUVs) and light commercial vehicles (LCVs) dominated the top 10 list of most popular vehicle models in 2020. There were 916,968 new vehicles sold in 2020, according to the Federal Chamber of Automotive Industries. Vehicle sales for 2020 were down 13.7% on the year before, due to Covid. However, sales for December 2020 were up 13.5% on December 2019, pointing to increasing business and consumer confidence. Contact us if you need a company car

Vast majority of business loans now being repaid

Australian businesses are continuing to get on top of their loan commitments, according to new data from APRA. Just 2.4% of all loans to small and medium enterprises (SMEs) were deferred in November – well down on the 18% figure recorded in May, at the height of the Covid crisis. Looking at the state-by-state breakdown, Victoria has the most business loan deferments, while South Australia has the fewest. Business loan customers are doing better than home loan customers, with 2.8% of mortgages on pause in November.

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