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For some businesses, equipment and machinery is essential to ensure financial success. Whether it's heavy machinery, specialised medical equipment or the latest IT devices, equipment finance can give you access to the funds you need to acquire what your business needs to continue running.
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Equipment finance is designed to give you access to the funds you need to purchase essential specialised equipment for your business. Whether you're looking to purchase a forklift to move goods in your warehouse or specialist medical monitoring machines for your private practice, equipment finance is on hand to help. A large number of banks and other financial institutions offer this lending possibility, though there is a range of equipment finance options borrowers can choose from. However, choosing the best approach for your business will depend on a range of factors including your financial situation, taxation needs and budget.
Equipment finance gives you access to whatever important business equipment you need without having to pay for it upfront. Instead, you can receive the funds you need from a bank or lender and then work to pay off your purchase over a set repayment period. In other words, you get all the benefits of ownership before you actually own the equipment. However, there are several different financing routes you can choose to go with, including taking out a business loan, a hire purchase, finance lease or novated lease. Read on to find out more about how each different type of equipment finance works.
| Finance | Lease | |
|---|---|---|
| Convenience | A loan relies on the lender's willingness to provide funding, with negotiations needed to establish rates, deposits and secured assets. | With no need to bother the banks, leases can be extremely convenient. If you know what you want and where to find it, agreements can be reached quickly. |
| Control | During the process of buying the equipment the borrower has complete control over how and where it is used. | The company providing the lease keeps ownership of the equipment. This may allow them to impose restrictions on its usage. |
| Flexibility | Should you discover that you no longer need the equipment, you will still need to make repayments until you pay off the loan. | You may be given the opportunity to pay the outstanding amount to buy the equipment at the end of the lease period. Alternatively, you might choose to pay the total value of the equipment in order to finance a separate lease. |
If the equipment will be used for a long time and you have access to consistent cash flow, lending could be the way forward. Leasing might be better suited to companies with lower revenue and those seeking equipment that has a shorter life span. Short-term leases allow for expensive equipment to be changed every few years, with some agreements requiring that the lease provider update products regularly within the lease period.
The main pitfall to avoid with equipment finance is getting into a financial agreement that you simply cannot afford to service. It's important to consider how essential any equipment is before you commit to a purchase, as well as make sure you're aware of your ability to make repayments on time. Another common issue is that some people can get confused by the array of equipment finance options available. Seeking assistance from your accountant is usually the best way to go to ensure you make the right choice.
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Hi
I need to get a loan or finance for some product. I’ve got really bad credit and everywhere declines me, even though my business which is doing well and has good credit. Where can I get a loan that doesn’t look at the director or just approves me. I will pay high interest, I don’t care.
Hello Andre,
Thank you for the inquiry. :)
You can visit this page for bad credit business loans. Please review the eligibility requirements to make sure you have higher chances of getting approved. We have also listed unsecured personal loans for business purposes and for business financing.
Hope this helps.
Cheers,
Jonathan
Dear Sir/Madam,
How are you there?
I am interested in your services. I want to buy a commercial industrial flake ice making machines in Australia for my ice plant project buy. My factory is outside Australia, can you help me with loan to buy my plant equipments? I already have quotation from the manufacturers in Australia and I want five years duration period to clear my plant equipments loan.
Thank you.
Hi Kakeeto!
Thanks for the comment.
Actually, you’re on the right. :)
You can compare the list of lenders we have on the comparison table based on your personal preferences such as term, fees and loan amount.
Please make sure that you have read the relevant T&Cs or PDS of the loan products before making a decision. Moreover, check the eligibility requirements as well and consider whether the product is right for you.
Also if you can, contact first the lender and discuss your options and chances of approval before you send anything final for your application.
Hope this helps.
Cheers,
Jonathan