After stepping into the role of CEO at Metro Finance, leading independent non-bank lender for asset finance, David Albest sat down with Retailbiz to discuss the current financial landscape, the evolving Metro Finance offering, what’s on the horizon for 2025 and why he encourages small businesses to engage with a broker to discuss financing options.

“Most of our loans are for commercial and business customers, and in the past six months in particular, we’ve seen subdued confidence for making big capital purchases,” he said.

“While business is still good and demand is still there, the growth rate isn’t as strong as in the past. We’re also seeing customers aren’t paying out their contracts as early as they used to, which tells us that businesses are hanging onto their assets for longer and waiting to see how things play out.

“On the flip side, there are businesses that still have cash and make their repayments on time. By historical standards, the number of loans in arrears are still very low. But both of these factors point to more of a confidence issue. Our view is that when the RBA starts to cut rates, it will inspire a lot of businesses to make those big purchasing decisions again.”

MetroEco product

In November, Metro Finance expanded its MetroEco product to include electric trucks and forklifts. The program offers discounted rates and flexible terms to make it easier and more affordable for SMEs to invest in environmentally friendly assets, such as electric vehicles (EVs), farming equipment, solar panels and charging solutions.

“We’ve put a lot of effort into building out and launching the MetroEco product. It’s the second time we’ve released this kind of product, and both times, we’ve partnered with the Clean Energy Finance Corporation (CEFC). This time, we’ve taken all the lessons we learned and applied those for the basis of the product – how do we get businesses and individuals purchasing electric vehicles, but more broadly, energy efficient assets?” Albest said.

“The best way to do that is to offer a discount with pricing. The core of the product is to influence purchase decisions through discounts for energy efficient assets. With the CEFC being a government-owned green bank, it reflects a big push from the government, alongside government stimulus including the fringe benefit tax incentive for EVs.

“We offer a 70-basis point discount on assets such as EVs and we track the emissions of these assets over time to demonstrate how successful it has been. Looking back to June 2022, on average, every car we financed would have emitted 3.4 tonnes of CO2 per year. Now, this has reduced to 2.7 tonnes of CO2 per year, so we know it has been effective in the push to EVs, particularly in the novated leasing space. I’d say around half of the cars we finance are now electric.”

However, Albest acknowledges that there are a lot of differing opinions when it comes to EVs. “As a phase one adopter of EVs, I own an EV and find it invaluable when driving around town; you simply take it home and plug it in at the end of the day. But I also have a petrol car which is used for longer trips. Once EVs can do a longer range on a single charge, I believe it will drive a higher rate of adoption,” he said.

“Another major factor is around the re-sale value of EVs with a lot of price movements over the past few years. Tesla has implemented a few price cuts and Chinese imports are coming in at low price points. It’s unusual to see these downward movements in the car industry which does cause concern for buyers.”

What’s next for Metro Finance?

During the remainder of the current financial year, Metro Finance will continue to look at its internal applications and processes to promote better outcomes for brokers and for customers.

“We want to ensure that our applications are reliable and user friendly to improve our ability to provide the best outcomes for brokers and our customers. For example, how do we make data more accessible to brokers so they can identify opportunities with their clients when it comes to new loans in terms of credit settlements,” Albest said.

“We are also looking at how we can automate these functions to provide faster loan decisions and faster payments to customers and suppliers. On the customer service side, we are leveraging the latest technologies in terms of Artificial Intelligence (AI) and Machine Learning (ML) to make the full customer history available to a customer service agent so they can get to the heart of the problem quicker.

“Longer term, we are looking at new products. What are our core capabilities and advantages as a business? How can we turn those into new products for businesses and customers? Right now, we’re purely broker driven, but what other channels can we explore? For example, can we make our products available to regional banks and credit unions so they can offer asset finance to their customers?”

Banks aren’t the only option

Metro Finance understands that small businesses, whether in construction or retail, are time-poor and need to focus on operating their business.

“They often don’t have time to think about the benefits of different financing options, but brokers play a key part in that,” Albest said.

“I would encourage any small business to investigate and reach out to brokers because it’s a huge value-add. If you need a new forklift or car, the broker takes care of the whole process. They just ask a few questions and next thing you know you’re getting approval and are signing contracts. Many small businesses think that the bank is the only option for finance so I encourage them to just talk to a broker and find out what’s possible.”