Tata Capital Blog
  • Aspiration
    • Home Loan
    • Business Loan
    • Education Loan
    • Vehicle Loan
  • Lifestyle
    • Personal Loan
    • Travel Loan
    • Wedding Loan
    • Consumer Durable Loan
    • Home Renovation Loan
  • Protection
    • Medical Loan
    • Insurance
  • Finance Essentials
    • Loan Against Property
    • Loan Against Securities
    • Wealth Management
    • Trends
    • Government Regulations
  • Moneyfy
    • Investments
  • Business
    • Equipment Financing
    • Equipment Leasing
    • Working Capital Loans
    • Term Loans
    • Construction Finance
  • COVID-19
    • CORONAVIRUS
    • GOVERNMENT UPDATES
    • WORK FROM HOME
    • LOCKDOWN SOLUTIONS
    • FINANCE SOLUTIONS

Archives

  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • July 2017
  • June 2017
  • March 2017
  • January 2017
  • November 2016

Newsletter

Enter your First Name and Email Address below to subscribe to our newsletter

Categories

  • Business Loan
  • Construction Finance
  • Consumer Durable Loan
  • CORONAVIRUS
  • Education Loan
  • Equipment Financing
  • Equipment Leasing
  • FINANCE SOLUTIONS
  • Government Regulations
  • GOVERNMENT UPDATES
  • Home Loan
  • Home Renovation Loan
  • Insurance
  • Investments
  • Loan Against Property
  • Loan Against Securities
  • LOCKDOWN SOLUTIONS
  • Medical Loan
  • Personal Loan
  • Term Loans
  • Travel Loan
  • Trends
  • Vehicle Loan
  • Wealth Management
  • Wedding Loan
  • WORK FROM HOME
  • Working Capital Loans

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Tata Capital Blog
  • Aspiration
    • Home Loan
    • Business Loan
    • Education Loan
    • Vehicle Loan
  • Lifestyle
    • Personal Loan
    • Travel Loan
    • Wedding Loan
    • Consumer Durable Loan
    • Home Renovation Loan
  • Protection
    • Medical Loan
    • Insurance
  • Finance Essentials
    • Loan Against Property
    • Loan Against Securities
    • Wealth Management
    • Trends
    • Government Regulations
  • Moneyfy
    • Investments
  • Business
    • Equipment Financing
    • Equipment Leasing
    • Working Capital Loans
    • Term Loans
    • Construction Finance
  • COVID-19
    • CORONAVIRUS
    • GOVERNMENT UPDATES
    • WORK FROM HOME
    • LOCKDOWN SOLUTIONS
    • FINANCE SOLUTIONS

Will Construction Equipment Finance Market Grow Post COVID-19?

by tatacapitalblogOctober 9, 2020 in Construction Finance, no comment
Construction Equipment Finance Market Grow Post COVID

Economic slowdown, delayed construction projects, muted construction activity, reduction in funds from both the centre and state have impacted the construction equipment (CE) industry poorly. As the overall economic activity remains on the low, investment in infrastructure across sectors is unlikely to pick up in the near terms.

Especially since the COVID-19 induced lockdown, the industry faced a steady decline in revenue as construction sites were forced shut and supply chains were disrupted. Government relief was also limited, as the funds reserved for infrastructural spend were reallocated to the healthcare sector, which worsened the condition of the CE sector furthermore.

Government may also roll back the plans on infrastructure capital expenditure by years due to the increased financial stress. Not to mention, the CE industry relies on the construction and infrastructure industries which are already ridden with operation failures and reduced cash flow. Revival in demand is likely to be slow.

Additional Read: Top Trends in Construction Equipment Finance Market

Demand slowdown

Government and private capital spends have been the primary drivers of demand in the CE industry. But with liquidity strain in the finance market, both CE sales and rental demand faced a sharp fall. Due to the loss of sales and overall economic slowdown, the domestic mining and CE (MCE) sector saw a volume downturn of over 20% in the CY2020.

However, the demand forconstruction equipmentsaw a welcome rise in the rural sectors, in the month of June; mainly driven by irrigation, agriculture, mulching, and canal clearing activities. But the demand was only a temporary, short-lived relief. To revive the demand for CE, both central and state governments are in talks to reopen the highway construction projects and restart the construction activity on a full scale.

Nonetheless, the CE industryis expected to degrow by 15-20% in CY 2020 states ICRA. If the construction and infrastructure sectors continue to face an economic slump, the CE industry will only follow suit.

Loss of buyer confidence

Given the current market scenario, construction finance will witness an increase in the credit risks. This will inevitably cause finance disruptions as borrowers lose out on additional funds due to lack of adequate cash flow and fail to procure the desired equipment.

Most financiers have shifted focus to debt collection instead, especially since RBI first announced the loan moratorium on March 27. Now, with an increase in bank credit to the sector, CE dealers may find it difficult to secure appropriate funds to keep the sales optimum.

Additional Read: Construction Equipment Leasing Vs Financing- Which One Suits Your Business

The bottom line

As uncertainty around COVID-19 continues, any conclusive forecasts on the condition of the construction financemarket will be of no avail. To resume operations in the CE industry, accessible CE finance will play a crucial role to drive the demand for CE but recovery will be slow. A full revival in demand is only possible once the coronavirus is contained indefinitely.

For competitive, easy CE finance solutions, you can rely on Tata Capital. Get a lucrative construction equipment finance at attractive interest rates and comfortable repayment terms. Our bespoke solutions cater to your business-specific needs at every step. Contact us to learn more.

Share on FacebookShare on Twitter
Previous

Top Trends in Construction Equipment Finance Market

October 9, 2020
Next

Plan Your Finances Better, This Dussehra

October 9, 2020

Leave a Reply Cancel reply

Related posts

Top Trends in Construction Equipment Finance Market

Top Trends in Construction Equipment Finance Market

by tatacapitalblogOctober 9, 2020no comment
Construction Equipment Leasing Vs Financing

Construction Equipment Leasing Vs. Financing: Which One Suits Your Business?

by tatacapitalblogOctober 9, 2020no comment
key-policy-initiatives

Key Policy Initiatives for Infrastructure Development and Financing

by tatacapitalblogSeptember 24, 2020no comment

Newsletter

Enter your First Name and Email Address below to subscribe to our newsletter

Recent Posts

  • Long Term Personal Loans Pros and Cons
  • How to Claim Tax Benefits on Education Loan?
  • How to Apply for a Personal Loan Top Up?
  • How to Apply for a Personal Loan Balance Transfer?
  • How Can a Personal Loan Help Save Tax in 2021?

Most Popular

  • What are the Steps Taken by the Government to Fight Coronavirus in India?

    What are the Steps Taken by the Government to Fight Coronavirus in India?

    April 3, 2020
  • Top 5 Mileage Bikes of Honda

    Top 5 Mileage Bikes of Honda

    October 17, 2019
  • Coronavirus: Facts vs Myths

    Coronavirus: Facts vs Myths

    March 12, 2020
  • Top Ten Best Bikes for Your Daily Use

    Top Ten Best Bikes for Your Daily Use

    December 18, 2019
  • Electric Scooter vs Petrol Scooter – Which One to Choose?

    Electric Scooter vs Petrol Scooter – Which One to Choose?

    September 2, 2020

© 2017 Rever Magazine Theme. All rights reserved.