Planned Government infrastructure spending, supply chain issues pushing up asset prices, and fixed rates will help prime commercial asset finance lenders to be among the most resilient lenders in Australia.

  • Metro Finance achieves $3bn lending portfolio
  • Auto and equipment finance borrowers on track to exceed 2022 levels
  • Construction and transport industries driving 44% of equipment loans
  • FBT concessions on EVs boosting vehicle finance in 2023

An industry CEO says lenders in this category are well positioned to weather any drops in consumer or business confidence – and has the reasons to back it.

Phillip Crossman is the CEO of equipment and car lender Metro Finance (, one of Australia’s leading providers of asset finance and, more recently, a provider of consumer car loans and novated leases. Since Phillip founded Metro in 2011, Metro has accumulated around 50,000 customers and a loan portfolio of $3 billion. It attracts borrowers through a network of 3700 brokers nationally and settles an average of $150 million per month. Last month, Metro closed a $500 million debt funding deal which attracted investors from Europe, Asia and Australia.

Why asset lenders will perform well even with continued slow economic growth.

Phillip says: “I expect our industry to withstand further interest rate increases and, if it arises, an economic downturn better than lenders that fund discretionary assets. The assets we finance are intrinsic to business operations: tradies need their utes to do their job, so they can be counted on to prioritise payments. The other favourable aspect of asset finance is that the interest rate is fixed for the life of the facility.”

CAFBA estimates that total receivables in the Australian equipment finance market are approximately $100 billion. AFIA estimated that total new equipment finance (including fleet leasing) was $36.6 billion as at 30 June 2022, compared with $34.0 billion at 30 June 2020.[1]

“Add in the infrastructure spending that our governments have committed to over the next 10 years and their commitment to more social housing, which will drive construction, and you have a good long-term environment for asset finance lenders,” Phillip says.

A total of $255 billion in government expenditure has been allocated to infrastructure over the four years to FY2025-26 – a 2.7 per cent increase over the previous year’s allocations.[2] At Metro, 44 per cent of commercial settlements are for businesses in the construction and transport industries.

In addition, rather than creating credit issues for the asset finance industry, tighter supply chains have underpinned the value of existing cars and equipment. A price analysis of 900 new car models by Drive found listed prices rose by an average of 14 per cent between January 2019 and January 2023.

Metro has seen a growing appetite for electric vehicle financing as a result of the Federal Government’s FBT concession. This is particularly in novated leasing volumes, with one in three car loans now being for EVs and PHEVs compared with one in 20 in the commercial channel.

Metro Finance: a case study for the industry

Metro Finance has experienced consistently strong business appetite for financing, having achieved 30 per cent year-on-year growth over the past five years. It was recently awarded the 2022 CAFBA Financier of the Year, Credit Team of the Year and Settlement Team of the Year. “Primarily represented by CAFBA, the commercial broker industry in Australia offers borrowers an important alternative source of finance to traditional bank lending. In the small-ticket asset finance market, third-party introducers account for 50-60 per cent of all originations”, Phillip says.

Metro lends to prime SMEs and individual borrowers in stable industries that purchase auto and equipment assets. It avoids lending to industries that are prone to volatility or for assets that have poor resale value. Metro’s loan portfolio is highly diversified, with risk diversified across geographical regions, borrower industries and asset types.

Metro differentiates itself in the market through high levels of personalised service, advanced back-office technology, and a user-friendly portal. Through this combination, it can take a tailored approach to its lending: brokers approach Metro to work through different scenarios for a customer. Metro can assess each case individually to determine how it can help the borrower achieve their goals.

Phillip says: “We don’t run an opaque credit score model to process applications. Instead, brokers have direct access to a range of Metro personnel to discuss and workshop deals with them. Alternatively, when an application is straightforward, we can use streamlined processes to complete it quickly. Technology is critical for delivering speed and cost-effectiveness – for instance, customer onboarding and risk assessments. We can do deals in under two hours.

Metro Finance is continuing to experience very low arrears and defaults, and Phillip expects any dip in demand will just be part of the economic cycle. “Capital markets are already factoring in interest rate declines. When inflation looks like it’s tamed and if the economy experiences a downturn, we anticipate the Reserve Bank will reduce rates to soften the landing.”