Do’s And Don’ts Of Equipment Financing

When you're operating a business, it can be difficult to find enough hours in the day to get everything done. So it is understandable if you do not know everything that there is to know about equipment financing. 

If you're thinking about financing a new piece of equipment or machinery for your business but are still not completely aware of all the essentials, don't panic! Over the years we have noticed that there are some dos and don’ts when it comes to financing business equipment, and for your convenience, we have listed them here in full.

Things You Should Do for Equipment Financing

1. Explain How the Equipment will help your Business

Be prepared to outline how the business equipment will benefit your business. An equipment financing company may want to know a projection for increased sales and increased savings stemming from the use of the equipment. 

2. Study your Numbers

Review your credit reports and assess your financial situation before an appliance financing provider. Expect the provider to request this information and be prepared to explain any problems.

3. Update Your Business Accounts

Review your business's credit report before searching for financing and update any information that is outdated or incorrect. If you have any negative information reporting on your business, be prepared to explain it to a potential lender.

4. Go for One Deal and not Multiple Ones

Consider bundling multiple business machines under one lease to ensure that everything is as simple as well as cost-effective. 

Things You Should Not Do for Equipment Financing

1. Not Knowing about All the Finance Options Available 

There are a number of options at your disposal if you wish to finance your equipment for your business. They include 

• Asset leasing 
• Commercial chattel mortgages 
• Cashflow funding 
• Equipment rental. 

Selecting the right option for your specific situation depends upon several factors such as how new or how old it is, the brand it's sourced from, and how often it will be used.

2. Not Thinking about How Much You Can Afford

Overstretching yourself can lead to potentially disastrous consequences later on, so make sure you have a realistic understanding of your finances before you pursue anything. So properly read your numbers before financing business equipment. When purchasing the equipment, ask yourself whether it will affect budgeting and if yes, how. Remember to calculate an estimate of the prospective revenue the equipment will generate.

3. Do Not Accept a Cookie-cutter approach of the Lender

It's important to select a lender that knows about your company's particular requirements and will find a specialized financing offer that fits them. When calling or visiting a bank, for example, you may speak with whoever is readily available at that time, and they may not be as competent in financing equipment and machinery as you’d hope. 

4. Not Enough Researching and Going Around in Search of the Best Deals

It is always vital that you do a good deal of research when searching for the best interest rates and terms for a loan that fits your needs. Carefully inspecting the conditions for each type of financing is also vital so as to avoid any surprises.

Another great mistake you can do while looking to finance your equipment is not choosing Finance Brokers NSW.  Experts in equipment finance and possessing a broad range of lenders, we will happily do the hard work for you so that you can focus on running your business.

For more information, call us at 0482 075 000 or drop a mail at lance@fbnsw.com.au.