Why use Equipment Finance?

Why use Equipment Finance?

Equipment Finance is a fast and easy way to purchase assets for your business. Funding is secured against the equipment being purchased so will not affect equity or take up any of the business overdraft. Often Equipment Finance facilities are more cost effective than other forms of finance.

So how would an Equipment Finance Facility help you?

 Cashflow

Equipment Finance facilities are structured over set terms of 1 to 7 years with fixed rate of interest. Monthly instalments are therefore fixed over the period of the facility with no chance of fluctuating, allowing you the ability to budget to these repayments. For seasonal businesses monthly instalments can be personalised to avoid payments during times where revenue is decreased due to seasonal or timing constraints. 

Asset secured

Equipment Finance facilities are often referred to as Asset Finance. This is because the funds financed are secured against the asset being purchased being a vehicle, piece of plant or machinery allowing your business to reinvest funds back into the business. Often there is no need to have a real property mortgage over land or buildings so equity is not effected.

Costs

While costs vary from lender to lender they all have a fee structure to establish a loan facility. Different lenders refer to these fees in different ways and will sometimes calculate the fee in different ways though they all generally have a cost to establish a source of credit. Because Equipment Finance facilities are such a simple form of finance the establishment costs associated with an Equipment Finance facility is usually less than standard business loans and overdrafts. The rate of interest being applied will largely be determined by the asset type and age of that asset. However, for the vast majority of Equipment Loans the rate of interest remains highly competitive against other forms of funding.

Timely

For most business owners’ time is their greatest asset and is therefore precious. While standard loan applications such as Business Loans and Overdrafts can take several weeks for funds to become available, Equipment Finance facilities can be ready within a few days – sometimes even same day. Many lenders have a streamlined application process which allows for automatic approval subject to the qualify criteria. However, a standard Equipment Finance application is normally settled within 3 days so there’s no delay collecting you asset. For more information about a streamlined application process please contact us directly.

For more information about Equipment Finance contact SB Lending at enquiries@sblending.com.auor by calling (07) 3810 8355.