Equipment Finance, why it makes sense

Starting a new business or growing an existing business can be a nerve-wracking experience at the best of times. If market conditions are uncertain, it can be even more difficult to commit to spending thousands on new equipment - no matter how essential.

Planning what type of equipment you need and selecting the items that will best meet your requirements is an important part of the process. Potentially even more important is working out how you intend to pay for it.

If, like many businesses, you do not have the cash to purchase your income-generating equipment outright but do have sufficient cash flow, equipment finance may be just what you're looking for. Even if you have the funds available, equipment finance offers a number of benefits for all sorts of businesses.

What type of equipment?

Business equipment of all sorts can be financed, from computers and IT equipment right through to heavy machinery, heavy commercial vehicles and even medical and scientific equipment. Almost any type of equipment can be financed - check out just some of the equipment you can finance here.

Different types of finance will apply to different types of equipment - taking into account the lifecycle of the equipment (the timeframe in which it will become obsolete), your business' structure and other requirements.

Down to detail

Once you've got a good idea of what you're after, consider the specifics of the equipment you need:

• Is it additional or replacement?
• Which brand/model do you want/need and why?
• Considered used or refurbished equipment?
• Is this equipment required every day, intermittently, or maybe seasonally?

Your equipment finance consultant will need to know exactly what you intend to purchase and how it will be used to structure a finance package that suits you.

Managing cashflow

Purchasing expensive equipment outright can have a significant effect on your cashflow.

Most often a deposit is not required for equipment finance - it's possible to finance 100% of your equipment cost. Acquiring your business assets using equipment finance allows the equipment to be paid for throughout its useful life, rather than in one payment.

Payments can also be structured to take into account the projected growth of your new business, the seasonal nature of your cashflow, and more.

Preserving capital

Financing your equipment leaves your capital and any lines of credit available for use in other areas of your business.

The financial risk of making large capital purchases can be significant, especially for smaller businesses. Financing your asset purchases can help to reduce your risk.

Smart planning

Equipment is normally financed at a fixed interest rate, with all payments during the term of the agreement known in advance.

In addition, you can normally choose to finance your assets in line with your business' growth and cycles - for example, you could structure your repayments to be lower while the business is building, or in the initial stage of a project.

Likewise, your payments can be structured around seasonal and other business-specific fluctuations.

Keeping current

Having current equipment, particularly technology, is important in today's market. In some industries it's absolutely imperative.

From airlines to engineering firms and GPS-directed taxis to Computer-Aided Design, the need for up-to-date equipment has never been greater.

quipment finance can provide the means to stay on top of the technology and equipment needs in your business. In addition, your finance can be structured to ensure that updates are simple to manage and you don't end up owning outdated equipment.

Flexibility to suit

When it comes to financing your equipment, there are options to suit your accounting, GST, ownership and payment requirements, both through-out the contract term and when it ends.

Knowing the length of time that the equipment is needed, your company's cashflow and projected growth and your tax situation will help your finance consultant structure the best equipment finance package for your business' needs.

Hold your cash - and have your equipment too

Financing business equipment can be complex at the best of times. An experienced broker like stratton will help you find the right structure and right lender for your business equipment finance needs, while making the process efficient and hassle-free.

Make sure your equipment earns its keep. Call 1300 738 290 to hold on to your cash and have your equipment too.