IN FOCUS / FINLEASE
PREPARING FOR THE POST DELTA UPLIFT After a nervous and slow start to 2021, essential industries such as construction and infrastructure drove the economic recovery with the crane sector being a major beneficiary. Then, the Delta strain emerged mid-year with shutdowns and further border closures bringing the industry to a grinding halt. Jeff Wilson, senior partner equipment finance with Finlease, examines the positives businesses can take from the lessons learned, and how many will be able to benefit the bottom line. “AS IS USUALLY THE CASE WITH ARTICLES, these words are penned a month or so before they are read. This story is written in the second week of August and we are surrounded by the significant challenges of an escalating Delta pandemic. Nonetheless, this is written with cautious optimism. It is hoped we will see vaccination rates reach the 70 to 80 per cent coverage, within Australia, by Christmas. Health experts tell us this percentage will provide the stability for life and the economy to return to an adjusted normal,” said Jeff Wilson, senior partner equipment finance with Finlease.. “In so many ways, this pandemic is like a particularly bitter winter. A winter which has claimed the lives of far too many as well as significantly damaging or destroying many businesses particularly in vulnerable industries. In our view, we should view this period in the knowledge that every winter is followed by spring and spring brings new hopes and aspirations. “As we look at the landscape, we can see many large and small projects have 90 / CAL September 2021
been delayed and the work needed to conclude them is behind schedule. This means pent-up demand is there. For me, the key question ‘is how many businesses are ready for the spring? And if they are not, what do they need to do to be prepared?’ As our discipline is finance, I will restrict my observations to this area,” he said. WHAT DO WE KNOW AT FINLEASE? The ongoing demand for so many industries, including the mobile crane industry, is there, and has been increased as a function of these COVID-induced delays says Wilson. “The Federal Government has provided significant tax incentives for businesses to invest and expand. The significant incentives are in place until June 30, 2023 and represent a once in a generation opportunity. Money has never been so cheap and typically, equipment finance interest rates are at record lows. Wilson said overseas economies are starting to recover, production of machinery and yellow goods, including
mobile cranes will increase. International freight movements will expand and so the equipment required will start hitting our shores in increased quantities. So, what do businesses need to do to be ready to upgrade and increase their current machinery equipment base? Finance will need to be secured. Wilson believes this should be done by obtaining the best all round deals which have acceptable terms and conditions for the debt. In order to secure the best outcomes, businesses should consider the following: 1. During this winter, avoid any premature deferment of existing finance payments if possible. With many of our clients, we can see they are currently a little uncertain about the existing business landscape, but many have good cash reserves off the back of a solid 2021 trading year. In the event this winter goes longer than anticipated and cash looks to be getting tight they can always seek those deferrals in coming months. 2. Fast track the production of the www.cranesandlifting.com.au
