Pepper Money predicts 2022 in asset finance space

by Mike Wood06 Jan 2022

Pepper Money has released its forecasts for the forthcoming year in the asset finance space, with brokers being advised to prepare for more business as SMEs look to progress in 2022.

The non bank has risen rapidly in the asset space in recent times, with a doubling in volume in 2021 that saw $3.3bn in assets under management announced in their most recent financial results.

Ken Spellacy, general manager of asset finance at Pepper Money, said that the sector was set to expand yet further, with the shift towards electric vehicles representing a particular opportunity for brokers and their clients.

Read more: Why brokers should be advising their clients to pay rate lock

“In 2022 we expect to continue seeing consumers and SMEs being drawn to finance partners and brokers that engage in a way that is relevant to them individually,” he said.

“As governments look to tackle fuel emissions, the production and sales of electric vehicles is expected to continue growing in demand – and this is a key market and focus for Pepper Money.

“Our digital plays over the next 12 months are designed to enhance our relationships with brokers and introducers; and we are leveraging our tech resources to simplify the finance journey, helping customers access the assets they need sooner.

 “Kicking off the year, we are really excited about supporting the Australian SME sector. As consumers start spending some of their savings accumulated during last year’s COVID lockdowns, businesses will need to invest in assets to meet this demand.“SMEs will be very busy so finance partners and brokers that can provide speed and convenience will be rewarded.”

Spellacy spoke specifically about the auto sector, traditionally one of the strongest in the asset space, and how it had changed in 2021 and looked to evolve further into 2022.

“We’ve witnessed the purchase journey fundamentally shift over the past 12-18 months, with the online buying process continuing to trend,” he said.
“Consumers expect simple and streamlined processes; and lenders and brokers will need to support a range of assets and scenarios.

“Dealers need to up and rethink their digital game, to provide experiences seen in other retail markets.

“2022 is the year to shake up their digital strategies and work with finance partners and brokers to ensure they are present at the beginning of the buying chain, not just the end.

“Consumer sentiment and demand is expected to increase as the economy heads towards full employment supported by strong GDP growth.

“Lifting of border closures will also likely see the hospitality and tourism sectors bounce back with increasing demand for commercial finance.

“While inflation and its impacts on debt capital markets is a consideration for all financiers, pricing discipline will become more important and put pressure on lenders who do not have the tech to deliver great experiences.

 “As we have experienced very recently, new COVID variants can pose a risk to consumer confidence however 2020/21 has shown us that even when broad sectors are locked down, consumer demand bounces back quickly.”