February Business Update

february business update

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Our business loan enquiry in January has risen to levels higher than pre covid.

Construction Sector Under Pressure

The construction industry is under pressure from supply chain issues and rising costs. 

Many businesses were already struggling to recruit the headcount or sub contractors they needed before being hit by an increase in labour shortages due to COVID isolation requirements.

Business owners have expressed concerns about finishing jobs in time, cash flow and delays to receiving progress payments.

Many in the sector are seeking support with lines of credit to secure confidence into the future even if there is not an immediate need for urgent funding. 

The strategy of securing credit could pay off as lenders could withdraw interest in new loans due to concerns over defaults to the construction sector.

We’re predicting we’ll receive an increase in funding requests to extend development terms for sites that have not been completed within their lender timeframes. 

Those with access to property security will continue to have options if the unsecured lender appetite to the sector recedes.

Manufacturing Industry Enquiry Increases

Manufacturing business activity seems to be on the rise with business owners seeking trade finance lines of credit to import raw materials, equipment and machinery.

We’ve also seen a rise in equipment finance enquiry for specialised, tertiary assets.

Low doc business loan solutions

Lenders supporting the purchase of specialist equipment have raised limits on their ‘no financials’ application processes meaning application to approval turnaround times can happen within 24 hours.

Overdrafts up to $1M at 7.5% pa secured only by a caveat and without a bank are encouraging enquiry for business owners turning over more than $10M.  

We have also seen lots of activity within the unsecured line of credit space with applications for limits between $50k and $150k.

Loans to pay out tax debt could increase

B2B businesses with high tax debt could come under cash flow pressure from ATO payment plans. 

For this reason, we expect a rise in invoice finance to support cash flow and unsecured lending and private lending to pay out tax debt if the ATO ramps up collection activity.

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