Last Mile Finance in Australia: Trends, Solutions & 2025 Policy Updates

The logistics and finance sectors are experiencing a seismic shift in Australia, driven by the growing demand for efficient last mile delivery and the funding solutions that power it. As e-commerce booms and consumer expectations rise, ‘last mile’ has become a buzzword not just for couriers, but for financiers, policymakers, and small businesses alike. In 2025, last mile finance is about more than getting parcels to the door—it’s about closing funding gaps, enabling green innovation, and future-proofing Australian supply chains.

What is ‘Last Mile’ Finance and Why Does It Matter?

‘Last mile’ refers to the final stage in the delivery process, where goods move from a transportation hub to the end customer. In finance, ‘last mile’ solutions address the unique funding needs of this critical phase—whether that’s vehicle leasing, warehouse automation, or working capital for small couriers.

• Rapid growth in e-commerce has placed unprecedented pressure on last mile networks, making efficient financing crucial for timely deliveries.

• Small and medium enterprises (SMEs) now compete with retail giants, requiring agile funding to upgrade fleets, adopt new tech, or expand workforce capacity on short notice.

• Environmental and regulatory pressures are driving demand for electric vehicles and green logistics, which often require upfront investment and tailored finance products.

The ability to finance last mile operations can mean the difference between scaling up and missing out. In 2025, financial institutions and fintechs are rolling out products aimed at this gap, including short-term loans, asset finance, and pay-as-you-go leasing models.

2025 Policy Updates and Funding Trends Impacting Last Mile

Australian policymakers and industry bodies have recognised the strategic importance of last mile logistics. This year, several key policy shifts and funding initiatives are shaping the landscape:

• Expansion of the Clean Energy Finance Corporation (CEFC) remit: In early 2025, CEFC broadened its investment mandate to include last mile logistics electrification, offering concessional finance for businesses transitioning to electric vans and e-bikes.

• Small Business Digitalisation Grants: The Federal Budget 2025 allocated $200 million in grants to help SMEs digitalise logistics and inventory management, reducing inefficiencies in last mile operations.

• Instant Asset Write-Off extension: The popular tax incentive now covers last mile delivery assets up to $30,000 per item, encouraging businesses to upgrade vehicles or invest in robotics for micro-fulfilment centres.

Fintech lenders are also stepping up. Platforms like Moula and Prospa have reported a 35% increase in short-term loan applications from logistics SMEs in Q1 2025, as businesses adapt to surging demand and fluctuating delivery windows.

Real-World Examples: How Australian Businesses Are Leveraging Last Mile Finance

From urban couriers to regional distributors, last mile finance is unlocking growth and innovation across Australia:

• UrbanGo Couriers (Sydney): Leveraged asset finance to electrify half their delivery fleet, cutting fuel costs by 40% and meeting City of Sydney’s new low-emission delivery zone standards.

• FreshHarvest Co. (Brisbane): Used a working capital loan to implement real-time tracking tech, slashing late deliveries and boosting customer retention in the crowded grocery delivery market.

• Outback Supplies (WA): Accessed a combination of government grants and micro-leasing to expand their last mile reach into remote communities, supporting local jobs and reliable access to essentials.

These stories highlight a common thread: targeted finance, enabled by new policy settings and digital tools, is helping Australian businesses bridge the ‘last mile’ gap—literally and figuratively.

Challenges and the Road Ahead

Despite progress, challenges remain. Many SMEs still face barriers in accessing competitive finance, particularly in regional areas or emerging sectors like electric cargo bikes. Interest rates, while stabilised in early 2025, remain higher than pre-pandemic levels, making the cost of capital a key concern. Additionally, the transition to sustainable logistics is capital-intensive, requiring ongoing support from both lenders and government programs.

Looking ahead, integration of AI-powered route optimisation, expansion of micro-fulfilment hubs, and collaborative funding models (such as revenue-based finance) are set to further transform last mile logistics and finance in Australia.