Lower Interest Rates Bring Confidence Back To Business Investment —Recovery Remains Gradual

Speirs Finance is seeing increased business investment enquiries, particularly from equipment distributors, civil construction and infrastructure businesses, as the Reserve Bank lowers the Official Cash Rate and wholesale funding costs continue to fall.

Michelle Herlihy, CEO of Speirs Finance, says some businesses are beginning to feel conditions may be turning.

“There’s a growing sense we’re through the worst. Lower rates, planned infrastructure work and the Government’s Investment Boost scheme are helping confidence,” Herlihy says.

She says while the improvement is encouraging, business confidence hasn't yet returned to pre-COVID.

"We're starting to see confidence developing, but it's gradual. This week's business survey showed many firms remain cautious, and that's understandable. Businesses have been through a tough period and they're being careful about how they deploy capital and debt facilities. What we are seeing is more willingness to have conversations about investment than there was six months ago."

Speirs Finance provides asset finance and leasing across sectors including healthcare, transport, agriculture, construction and technology. The company recently diversified its debt funding facilities by securing $200 million in an asset backed security transaction, signalling strong investor confidence in the non-bank lending sector.

Herlihy says some businesses are beginning to look at opportunities beyond standard equipment upgrades, including acquisitions and mergers.

"When confidence returns, we tend to see businesses start thinking about growth — not just maintaining what they have. Some are looking at acquiring competitors or merging with other businesses to build scale. That's a sign the mindset is shifting from survival to opportunity."

She says equipment distributors and civil construction businesses in particular are showing increased activity.

"These sectors tend to be good indicators of broader economic confidence. When distributors are ordering inventory and civil construction companies are investing in equipment, it suggests they're seeing demand pick up. We're certainly seeing more enquiries from both sectors."

"With rates reducing businesses will certainly see pricing benefits as they look to invest," says Herlihy. "But two businesses on the same rate can get very different results. The businesses that come through uncertain cycles in strong shape are often those that structure longer repayment terms to preserve cash flow, allow for seasonality, and build in options to adjust as conditions change.”

Herlihy says overall, signs are encouraging in this early-stage recovery.

"Strategic, well-structured investment will put businesses in the best position as conditions improve.”

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