Marketing, training, tech and even office furniture will take priority for businesses in 2025-26, with a national survey by business loan comparison platform Small Business Loans Australia (SBLA) showing 91 per cent of businesses plan to make non-capital investments to drive immediate efficiency, sales and growth without taking on significant financial risk.
The figures follow data by the Australian Bureau of Statistics that show private capital expenditure fell by 0.1 per cent in the March quarter of 2025, driven by a 1.3 per cent fall in plant and machinery investment, and is now 0.5 per cent lower than in March 2024. While some sectors seem to be pulling back, businesses overall are forecasting a still-healthy $155.9 billion in capital investment this financial year.
To ascertain which types of capital businesses are investing in this financial year, and what internal and external drivers influence their capital investment decisions SBLA commissioned an independent, nationally representative panel of 200 business owners and decision-makers.
In terms of capital investments, a significant proportion of businesses will invest in the more immediate needs of their businesses, such as operational efficiency and ending work-from-home arrangements. These investments are technology and IT hardware (38 per cent of businesses), followed by office furniture and fittings (28 per cent), the latter suggesting office enhancements to bring workers back. A smaller proportion plan to spend on larger-ticket items that need more financing or longer-term certainty, such as machinery and equipment (22 per cent) and motor vehicles (13 per cent).
The survey additionally found that the most common non-capital investments are new employees (31 per cent of businesses) and skilling up employees (35 per cent). Investment in product or service development (23 per cent), marketing and advertising (22 per cent) and customer experience enhancements (16 per cent) show businesses will also invest to grow efficiency and sales.
Small Business Loans Australia also sought to identify the internal roadblocks that would prevent businesses from committing to capital investment. Narrow financial constraints are the biggest barrier, with tight profit margins (43 per cent), insufficient cash flow (26 per cent) and prioritising debt repayments (17 per cent) likely to impact businesses.
The negative forces that most influence business capital investment are high energy costs (30 per cent), rising interest rates (24 per cent) and economic uncertainty (22 per cent).
“Business owners are making hard decisions about where to allocate limited funds, and our research shows there is a clear preference for investment that drives efficiency, customer acquisition and workforce capability. While they might not be prioritising big-ticket capital purchases at last year’s levels, many businesses are still planning to invest in growth,” founder of Small Business Loans Australia, Alon Rajic, said.
“Our research also revealed that the decision to invest in capital and the willingness to take risks is sensitive to internal and external pressures, the biggest being financial, including: limited finances, inflation and high interest rates.
“The good news is that businesses aren’t necessarily slowing down, they’re choosing those investments that have faster returns and lower risk. Businesses are making more selective and considered decisions about how they’ll grow this financial year.”
The full Small Business Loans Australia FY26 capital investment study can be found on the Small Business Loans Australia website.