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What type of equipment you will need?
This may seem like a no brainer, but it is vital to know what type of equipment you will need. This means making a list of every piece of equipment, no matter how minuscule it is, that will help you get the job done. Writing things can also help you get a clear picture of what is needed and how much money will be needed to finance your equipment.
This will be the opportune time to check whether you will be better off buying your equipment as new, used, or leased. Each option has its own benefits which are why it is vital to compare your options to know which one will work best for your business. Getting a second opinion in the form of a financial advisor can also come in handy when you want to make an informed decision.
Have you carefully analysed your finance options?
When looking for a savvy way to finance your equipment needs you will be grateful to find that you are spoilt for choice. However, with so much choice things can get confusing really quickly. The last thing you want is choosing a finance option that can destroy your cash flow. Speaking to a financial advisor or a broker can help you find a commercial loan that is suitable for your business.
Researching the best finance option is also important. You can compare various loan features such as the interest rate, loan term, ongoing fees, and charges to see if it will be suitable for your business's cash flow. Finding a loan that comes with features such as a low rate can also make replacing equipment easier.
A survey by Commbank revealed that 38.6% of businesses that turned over $500 million or more stated that a low interest rate on their loan was more likely going to positively influence them on replacing their current equipment. The interest rate on your loan can make a huge difference when it comes to the bottom line of your business. Therefore, it is vital to check and compare your options before deciding.
Are you getting a financier that understands your business?
How you manage your finances has a huge influence on the success of your businesses. Choosing the wrong finance option can eventually lead to the closing of your business as this can impact your cash flow and possibly lead to a debt spiral.
According to Fundera, 20% of small businesses fail in their first year, 30% of small businesses fail in their second year and 50% of small businesses fail after five years in business with one of the contributing factors being financing. Getting a finance company that understands your profession is important. Furthermore, finding a financier that understands that your business is not the same as the next can also play a vital part in finding financing that is suitable for your budget.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for commercial loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
