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Consolidated Operations Group (COG) has announced that it will “scale back” its direct lending operations for commercial equipment leasing with immediate effect, in order to “focus” on its outstanding portfolio of lease renewables, as the group feels the economic impact of COVID-19.
According to COG, the loan portfolio is “materially match funded”, meaning the group shouldn’t encounter short-term liquidity problems as a result of “lower than normal” liquidity.
The scaling back of direct lending operations, in conjunction with other cost-reduction initiatives, will result in annual expenditure savings of approximately $2.6 million, according to the group.
“This will further enhance COG’s strong underlying financial opposition and the ability of the business to successfully navigate any extended economic downturn,” COG stated.
However, it appears that COG will continue to rely on its third-party aggregation and finance businesses for growth and originations, as well as the support of the Reserve Bank and federal government initiatives, which will further facilitate its ability to lend to small businesses.
According to the group, there has been an influx of enquiries from small businesses looking for finance since the support packages have been announced, particularly the instant asset write-off extension.
As such, the group stated it is “well positioned” to leverage its national distribution network to support originations and growth through stimulus-backed lending to small businesses and SMEs, and that the prospect of such lending is “encouraging” for the business over the near term.