Finance is an essential component of business operations. Regardless of the size of your business, when you need to invest in equipment, very few will have the capital available to outlay for the full cost of the machinery or assets required.
In order to achieve their financial objectives, businesses need reliable pathways to securing finance for equipment. The equipment and assets they require in order to grow and expand their business and compete in an increasingly competitive market. Sourcing the best equipment finance deal at the cheapest interest rates can be critical to ROI.
During the COVID-19 crisis, the significance of a reliable pathway to finance was clearly highlighted. Banks were inundated with requests for deferments from customers making it difficult for established business banking customers to even contact their bank to discuss quality application requests for loans. Loans which in some cases were urgently required to pivot and adapt the changed market and start producing much needed goods.
Types of Equipment Finance
There are a range of commercial finance facilities available to businesses for the purchase of a wide range of equipment. These include: Commercial Hire Purchase, Equipment Rent to Own, Equipment Leasing and Chattel Mortgage.
These loan products have varying treatments of tax deductions, of GST, balance sheet entries and are structured to suit either a cash accounting or accruals accounting method. It is advised that businesses consult with their accountant as to which particular loan product would best suit their accounting methods.
Subject to lender guidelines and individual applications, finance is available for all sized businesses in all industries. Sole traders, owner-operators, SMEs and large corporations. Finance can be extended for the purchase of farming and agribusiness machinery, manufacturing equipment, heavy civil and construction equipment, mining equipment, general business equipment including IT, furnishings and other assets, medical and health centre equipment, gym and fitness equipment and many, many others.
Sourcing Cost-Effective Equipment Finance
Many businesses will automatically approach their transactional bank when they require finance for the purchase of equipment assets. However, banks are not always the most competitive or flexible when it comes to equipment finance deals. They often have strict guidelines including maximum loan amounts and maximum loan terms, which may not suit your anticipated ROI.
An alternative, and the solution favoured by most astute business operators, is to use the services of an independent finance broker with specific expertise and experience in the equipment sector. Finance brokers have access to multiple lenders and this wider choice means greater opportunities to source the cheapest interest rates available.
We know people that operate as finance brokers with specific equipment finance expertise. If you would like their contact details, please get in touch.