In Australia, the asset finance landscape is witnessing significant growth, particularly in sectors such as health and community services, education and manufacturing.
Recent data indicates an increase of:
- 35% in financing applications within the health sector,
- 24% in education, and
- 18% in manufacturing.
These industries are increasingly turning to asset finance to modernise operations and enhance service delivery in response to evolving market demands.
Here are some illustrative examples that highlight this trend.
HEALTH AND COMMUNITY SERVICES SECTOR
The health and community services sector is leading the charge in asset financing growth.
REGIONAL HOSPITAL
Funding requirement – the need to purchase advanced medical equipment
A regional hospital in Queensland needed to acquire advanced medical imaging equipment including MRI machines and ultrasound devices.
Challenges with traditional lenders
The hospital’s location did not meet standard bank lending parameters due to its regional setting.
The solution
By securing funding through a non bank lender using an asset finance arrangement, the hospital was able to spread the costs over several years rather than face significant upfront expenses.
This strategic investment not only improved patient care by reducing wait times for diagnostic tests but also enhanced operational efficiency.
The flexibility of repayment options allowed the hospital to allocate its budget towards other critical areas, such as staff training and facility upgrades, and ultimately benefited the community it serves.
EDUCATION SECTOR
Case study of NSW college
In the education sector, a college in New South Wales exemplifies how asset finance can facilitate improvements in learning environments.
Funding requirement
The college needed to upgrade its technology infrastructure, including interactive smartboards and digital learning tools. The administration team was worried about spending money upfront and straining the financial stability of the school.
The solution
By leveraging asset finance, the school was able to implement these upgrades without straining its operating budget.
Post implementation, the college’s administration noted that this investment significantly enhanced student engagement and learning outcomes and demonstrated how asset finance can empower educational institutions to innovate while maintaining financial stability.
MANUFACTURING SECTOR
Manufacturer
The manufacturing industry is also experiencing a surge in asset financing activity.
Funding requirement
A mid sized manufacturing company based in Victoria needed to upgrade its production line to win an important contract.
The solution
By opting for an asset finance solution, the company acquired high tech machinery, including state of the art robotics and automation technology, without depleting its cash reserves.
This investment not only improved production efficiency but also positioned the company competitively within its market.
The ability to spread payments over time allowed management to allocate existing financial resources toward employee training programs. This ensured that staff was equipped to operate the new technology effectively.
GROWTH
Our nonbank lenders have reported that their asset finance settlements have exceeded mortgage settlements for the first time, indicating a shift in borrowing preferences among Australian businesses.
The notable growth trends in asset finance within the health and community services, education and manufacturing sectors underscore the critical role that finance plays in enabling businesses to adapt to changing market conditions.
By leveraging asset finance solutions, these industries and others can modernise operations, enhance service delivery and ultimately drive better outcomes for their clients.
As the asset finance landscape continues to evolve, staying attuned to these sector specific trends allows us, as your finance broker, to provide valuable insights and tailored solutions to our clients.
For more examples of how we help SMEs grow their business with asset finance options, be sure to download our extended article on other sectors we help.