Whether launching a new business venture or expanding an existing one, there’s always much to consider. From financial affordability and insurance obligations to staffing requirements and legal compliance, keeping your head above water while managing business operations is no easy feat.
Securing the right financial foundation can seem overwhelming when your business requires costly machinery or equipment. But not when you have the proper support. At Fast Funding 4U, we offer tailored machinery loans and equipment finance options to alleviate financial strain and help businesses at any stage work toward growth. But just what is commercial equipment finance, and how can it benefit you?
Find out how business equipment financing can help your new business – contact Fast Funding 4U to speak to one of our machinery loan specialists.
What is Equipment Finance?
Equipment financing is a practical and flexible funding solution that allows owners to obtain business-critical machinery and equipment without hefty upfront costs and the potential to leverage large tax savings. From office computers to heavy construction machinery, a business equipment loan helps you spread the cost and preserve your precious cash reserves.
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Benefits of Equipment Financing
Are you considering financing equipment or machinery for your business but are unsure if it’s the right path? At Fast Funding 4U, we believe transparency is vital for making those all-important business decisions, so let us walk you through the key reasons to choose business equipment financing.
Access The Latest Technology
Whether you’re just starting out or looking to upgrade and speed up your daily duties, we’re sure you want to use the newest, most advanced equipment. Operating at the top level is often unaffordable, especially for small and medium enterprises. That’s where equipment or machinery loans can help. With lower upfront costs, equipment finance solutions allow you to invest in better tech that may have otherwise been out of reach, helping you stay competitive and current.
Protect Your Cash Flow
Purchasing equipment outright can cost you thousands of dollars. Not only does this kind of investment rely on you having the cash available in savings, but lump sum purchases can wreak havoc on your cash flow and reduce potential tax advantages. Small business equipment financing allows you to spread the cost of expensive equipment over several years into manageable monthly repayments. This way, you can maintain a steady cash flow and have total visibility over available cash.
Preserve Your Working Capital
Consistent cash flow is one side of the financing coin; the other is capital. By choosing equipment finance for business investments, you can retain cash reserves for any expenses that come your way. This is particularly vital for small and medium-sized businesses and start-ups, where capital is typically less abundant.
Tax Benefits
Small business equipment loans often come with attractive taxation benefits. Depending on the type of equipment or machinery finance you choose, you may be eligible for tax deductions amounting to a percentage – or even the full purchase price – of the equipment. Make sure to check your tax code with your accountant and speak to one of our highly experienced equipment brokers for a solution. We work hand in hand with you and your accountant to obtain the best deals and vital tax deductions for your business.
Faster Scaling
An equipment finance loan is particularly advantageous for new businesses looking to fuel their growth fast. By eliminating the need to rely on cash reserves, equipment loans enable you to acquire the best tools for your needs, giving you more freedom to grow your business. What’s more, if you can afford to pay cash for one item of machinery, you may be allowed to place multiple deposits on other equipment, helping to fuel your business even quicker.
How Does Equipment Finance Work?
We’ve discussed the ‘why’, but what about the ‘how’? Equipment and machinery finance in Australia allows businesses to take out a loan for specific equipment needed. Business owners then make regular payments – typically in fixed monthly instalments – to pay off the cost of the equipment, plus interest charges. Depending on the type of equipment finance chosen, the business will either own or return the equipment at the end of the loan period.
Types of Equipment Finance
It’s essential that you consider all commercial equipment financing options before taking out a business loan. While all solutions allow you to obtain machinery and equipment without prepayment, there are some important distinctions you must be aware of. Here are the three main types of equipment finance available in Australia.
Equipment Loan
Also known as a chattel mortgage, an equipment loan provides you with a loan for the full equipment cost. The equipment (chattel) is secured against the loan, meaning the business has legal ownership of the asset, but the lender holds security over it until the loan amount is repaid in full. Chattel mortgages sometimes offer the option of a balloon payment due at the end of the loan agreement, which can reduce the monthly payments and decrease the overall loan cost.
Finance Lease
Sometimes called a capital lease, this type of equipment finance involves the lender purchasing the asset and leasing it to you for an agreed period. A popular method of equipment lending, a capital lease may give you the option to buy or return the equipment once the term ends.
Commercial Hire Purchase
Similar to finance or capital leases, a commercial hire purchase involves the lender purchasing the equipment and leasing it to your business for an agreed-upon period. Once the term ends and the final payment is made, you take over the ownership of the equipment.
Choose Fast Funding 4U for Commercial Equipment Financing
If heavy machinery loans or business equipment finance sound like the right option for your business, don’t hesitate to contact us today. We’re always on hand to discuss your needs and help you find the best solution to help your business grow.
Our professional finance brokers have over 30 years of experience helping businesses like yours reach their full potential. We’re firm believers that communication makes all the difference. We pride ourselves on building long-term relationships with our clients, ensuring we understand their specific needs and goals before offering professional advice and solutions. Call our team on 1800 44 22 89 today or reach out via the button below.
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