Australian SMEs are pouring money into new equipment, vehicles, and technology – and seeing clear productivity pay‑offs. But for many construction and trade clients, the cost of capital is moving the other way.
New asset finance data from CommBank shows businesses upgrading vehicles, machinery, and technology are reporting strong efficiency gains, with many lifting output by double‑digit percentages after recent investments.
Larger firms are most likely to report the biggest improvements, reflecting greater scope to modernise fleets and equipment at scale.
Renee Theodor, CommBank general manager of asset finance, says the usual end‑of‑year rush was far more pronounced. A surge in December financing was typical seasonal activity, but in 2025 it was happening “at a much higher level”.
“The end of the year is often an attractive time to purchase, with suppliers offering incentives to move existing stock ahead of new model launches. This allows businesses to secure better pricing and begin the new year with upgraded equipment ready for work,” Theodor said.
Agriculture and manufacturing led the charge, alongside strong demand for shop and office refits, technology assets, and trucks. Many SMEs are also eyeing hybrid and electric vehicles, earthmoving gear, and office tech as they look for incremental efficiency gains and lower running costs.
The picture is much tougher in construction and trades. New lending data from broker SaaS platform Lend shows that while median rates in the sector sit around the high single to low double digits, some higher‑risk borrowers are being charged more than four times that level, with headline rates climbing into the 20–50% range.
CEO of Lend, Bill Baker, says the gap could widen if the current rate environment persists.
“We’re seeing lenders segment risk within the trade sector more aggressively, and that trend is likely to continue if inflation remains above the RBA’s 2–3% target band and further cash rate hikes materialise,” Baker said. “In that environment, profit margins compress, project viability becomes more sensitive to funding costs, and capital is priced far more selectively.”
That has direct consequences for the construction pipeline, from delayed equipment purchases to shelved projects when funding costs blow out.
In a market where risk‑based pricing is this sharp, small changes in how a file is presented can have outsized impacts on the rate.
Baker says refinements ahead of submission are critical.
“Brokers need clearer visibility into how a client is likely to be risk-tiered before they submit an application,” he said.“AI-driven, real-time credit risk scoring and client profiling technology can help brokers identify vulnerabilities early and position the deal more strategically.”
In this environment, brokers who can clearly demonstrate risk quality and structure deals carefully will be critical to keeping viable projects funded.
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