Equipment Finance

About Equipment Finance

Equipment finance may be regarded as a loan that businesses use to secure the purchase of equipment that aids their work. You may take a loan to obtain new equipment or update existing equipment to improve the business output. This sort of loan is not limited to businesses that use large-scale equipment and require substantial funds to purchase them. It includes small-scale businesses that need necessary items to aid their business activities, such as sanitary equipment.

Young business man appoval stamper stamp on paper business contract, loan money approved.

In obtaining equipment finance, you must also decide whether it is advisable to get financing or buy the equipment outrightly. For instance, a business that requires a single cheap piece of equipment should endeavour to purchase the system with personal funds. Still, if it is a large-scale operation requiring heavy equipment, the business owner may opt for financing deals. This process is what we help you with at SN Lavalin. We offer you financial deals for easy asset acquisition.

Often, the value of the equipment acts as security for the loan. This financing option is similar to obtaining a loan to purchase a car or a mortgage to purchase a house.

Any business can seek equipment finance, and it could range from a food business needing industrial ovens to a transport business needing Big Mack Trucks. In this case, you may outsource a loan or choose from our available finance options for bulk purchasing equipment. Since equipment finance is similar to a house mortgage, if the loan is secured and default in payment occurs, we may repossess the equipment depending on your financing choice. To qualify for any financing option, the business must use physical equipment, such as vehicles, ovens, computers, among others. Also, your business must be good for the loan and have the financial capacity to provide service and maintenance of the equipment.

A business may decide to make use of equipment finance for various reasons such as the fact that the equipment may be too expensive to purchase outright, the business owner may also wish not to make use of personal funds to acquire the equipment, the business may be in a lane that always has a new technology being developed, and the company needs this new equipment to thrive, the need for new equipment may also warrant seeking out equipment financing.

Equipment finance helps start-up businesses that may not have the required capital to purchase heavy machineries. It also allows the company to retain a sort of liquidity from not removing money outrightly from the business capital. Still, payment from the financier spread across a couple of months.

Machine equipment in factory

Type of Equipment Finance

In equipment finance, the business owner must choose the type of financing agreement that best suits the business’s needs and whose terms are favourable to the business. At SN Lavalin, we offer the following types of equipment finance

Asset Lease

With this type of equipment finance, the business makes use of the equipment which has been purchased by the financier and may use the equipment in his company, all the while making monthly payments to the financier for the term after which the lessee may pay a lump sum and acquire ownership or may start another lease agreement.

Commercial Chattel mortgage

Fusce tincidunt, urna sit amet molestie imperdiet, dui velit vulputate justo, nec blandit risus ipsum a ex. Mauris gravida tempor volutpat accumsan hendrerit.

Equipment Rental

In this scenario, we purchase the equipment or sell it to you, or you approach us to rent the equipment for a monthly stipend for a fixed period after which the business owner or lessee may choose to return the equipment, renew the rental or make an outright purchase of the equipment from the financier.

Cashflow Funding

In this situation, the business owner uses revenue not yet made available to the business as security to secure a loan from financiers to obtain a piece of equipment.

Organization challenge

Equipment finance grants businesses the opportunity to acquire equipment which they need to help their business grow and to avoid the hassle that may come with owning such equipment and allows the company to keep a sort of security by not allowing it to dip into its reserves to purchase such equipment which would have been necessary if unable to secure financing.

Increase in work capital

Every business, at one point in time, is faced with a shortage in cash flow. However, the effect of obtaining financing to purchase a piece of equipment frees up the working capital. It allows the business to acquire much-needed machinery while maintaining its liquidity and freeing up cash for it to use in other endeavours geared towards the betterment and improvement of the business, including expansion.

Equipment Trends

A few businesses are in industries with significant advancement in their technology. Hence, the equipment used in such companies get upgrades quite frequently, which means with the opportunity that obtaining a loan or a lease as the case may be open up for a particular business, the lessee may be able to keep up with the change in trends, by obtaining new technology with the help of the financier.

Tax Benefits

In equipment finance, the lessee makes monthly payments to the lessor or financier. Each payment has an interest rate, and this interest May be regarded as tax-deductible.

Other loan options

With equipment finance, the business may obtain a loan for the purchase of equipment and still be left with other options for securing loans for other purposes other than buying equipment. Since the equipment serves as security for the loan in an equipment finance agreement, the business may have other securities available to help obtain a loan.

Easy to obtain

Unlike requesting loans from the banks, equipment finance is relatively easy to obtain. If you can show that the business is in good standing and its credit is sound or that the purchased equipment is valuable enough, you may acquire your desired loan option.

Increase Competitiveness

The purchase of up-to-date equipment allows businesses to keep up with modern trends, keep a competitive edge with other companies in that lane, and enable business growth.
Business and finance desktop
Testing new equipment

Disclaimer

Please note that all information provided above by SN Lavalin is general for careful consideration and derived from authorised Australian Government bodies. We shall not be liable for any error in understanding, presenting or interpreting, or analysing the information supplied in the main domain. Therefore, you are advised to consult your accountant, lawyer, or financial analyst for expert advice.