Equipment Finance Loans

So, you want to buy, upgrade or replace a piece of equipment vital to the operations of your business.

You have a number of options –

A car for example could be bought under a hire-purchase agreement.

A piece of farm equipment might might be best suited to a chattel mortgage.

A large photocopier for the office might be leased

All have their pros and cons and if you are unsure about which is the best for your circumstances talk to your accountant.

In some instances, you can finance a piece of equipment you have already bought allowing you to free up some funds.

Eligibility

 One of the upsides of equipment finance is that in most instances a lender will use the piece of equipment as security. Your home should not need to be encumbered or any other assets you own.

However, the lender will require that you have an ABN and your business is registered to pay GST.

The equipment should be used for business purposes, your credit rating needs to be good and your business should have been running for at least 12 months.

Key Stats

How much you borrow depends on the value of the asset and whether the lender requires that you provide a deposit. Loan terms can be from 3 months to 5 years or longer with interest rates around the 5% p.a mark.

Repayments can be negotiated and turnaround is very fast compared with other forms of finance.

Pluses include the tax benefit of depreciation, some GST advantages and a relatively simple application processes, however be aware that fees and charges may be high. Read the terms and conditions carefully.