Aussie small businesses are tightening their belts and thinking smarter about where their dollars go in the 2025–26 financial year, and spoiler alert: it’s not about splashing cash on big, shiny assets.

Research from Small Business Loans Australia reveals that while most businesses are still planning to invest, they’re shifting away from traditional capital spending in favour of smaller, more strategic moves that deliver quicker bang for buck.

In a national survey of 200 small business owners and decision-makers, 91 per cent said they’ll make non-capital investments this year, compared to 76 per cent planning at least one capital purchase. That’s a strong signal that businesses are prioritising flexibility, efficiency, and people power over expensive long-term commitments.

How small businesses are spending

When it comes to capital buys, tech tops the list. A third of businesses (38 per cent) plan to invest in IT hardware, like  computers, servers and all the gear that keeps things ticking. Coming in next? Office furniture and fittings (28 per cent). It seems the push to lure staff back to the office is alive and well, with more businesses investing in creature comforts to make the office feel less… 2020.

However when it comes to the big stuff like machinery (22 per cent), vehicles (13 per cent) and other big-ticket items, businesses are holding off. Many are thinking twice before locking in hefty finance deals in today’s economic climate.

On the non-capital side, it’s all about people and performance. The most popular play? Upskilling employees (35 per cent), followed by hiring fresh talent (31 per cent). Then there’s a good chunk of businesses putting money into product development (23 per cent), marketing and advertising (22 per cent), and improving customer experience (16 per cent. All of which are smart moves if you’re chasing growth without going broke.

Why the shift in investments?

It all boils down to financial pressure. The top three hurdles holding businesses back from big capital spending are:

• Tight profit margins (43 per cent)
• Cash flow constraints (26 per cent)
• Debt repayments (17 per cent)

Add to that external factors like high energy costs (30 per cent), rising interest rates (24 per cent) and general economic uncertainty (22 per cent), and it’s no wonder business owners are playing it safe and prioritising lower-risk, faster-return investments.

Alon Rajic, founder of Small Business Loans Australia, says it’s not that businesses are afraid to grow, it’s just that they’re being more strategic about how they do it.

“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,” Rajic explains.

“They’re still planning to grow, just not by spending big on machinery or fleet vehicles. Instead, they’re choosing investments with faster returns and lower risk. It’s smart, considered decision-making in a challenging environment.”

What the research means for business owners

If you’re running a small business and figuring out where to spend (or save) your hard-earned cash this financial year, the message is pretty clear: keep it lean, move quickly, and focus on investments that deliver results you can actually see.

That might mean choosing to upskill your existing team before bringing on new hires, or putting your marketing dollars into channels that give you real, trackable bang for buck. It could be about upgrading the tech you rely on every day to run your business more smoothly, rather than splashing out on flashy gear that ends up collecting dust. Or it might involve tightening up your customer experience to keep people coming back for more.

Whichever way you slice it, 2025–26 is shaping up to be a year of smart, surgical spending, not big-ticket splurges. Aussie small businesses aren’t hitting the brakes, they’re just being sharper and more strategic about how they grow.

Want to dive into the full survey results? Head over to Small Business Loans Australia for a full breakdown by state and sector.

want more financial advice or expert tips on cash flow? Check out our finance hub

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