5 benefits that come with equipment finance

Published on November 19th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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1. Manage your cashflow better

Having enough cash flow to manage your businesses expenses is vital to any business. According to research conducted by McCrindle, 51% of business startups do not survive after 4 years of operation. Furthermore, 41% of businesses had to close their doors due to an inadequate cash flow. A commercial loan can help ease up the strain on a business's cash flow. You can also manage your budget more efficiently with a loan that comes with repayment plans that work for your business.

2. Get start-up capital

You may have the perfect business plan that has looked at every angle of making your business thrive. However, without the start-up capital, your business can continue to remain a dream. Knowing which finance option can bring you the best financial solution to help purchase the equipment you need to kickstart is essential.

There are many business finance options that can give you 100% finance with no deposit required to get you started. Before you take such finance make sure to check if the features are suitable for you such as; its interest rate, repayments, ongoing fees, and charges. This can also free up whatever cash you have to use in other areas in your business.

3. Keep your business up to date for more efficiency

There can be high running costs when it comes to purchasing equipment to keep your business running efficiently. There were 33% of Australian businesses that went under due to having high running costs which resulted in poor financial control in 2013. If you are in an industry that requires constant updating of your equipment you may find your budget buckling. There are finance options such as leasing that can let you update your equipment to the latest model with a low cost when compared to having to purchase equipment.

4. You can eliminate the risk of ownership

Purchasing equipment is an investment that needs to be carefully considered as this can affect how your business’s cash flow. If your business is just starting out and doesn’t have enough wiggle room for you to foot expenses such as depreciation, maintenance, and repair you could be better off leasing as this will eliminate the risk of owning the equipment. There are also options that can let you lease to own your equipment.

5. You can seek professional advice

Not too sure which option will be best suited for your current financial situation, or put further strain on your budget? Approaching a broker or a lender can help you quickly find out what options will be best suited to your situation. They can also give you loan options that come with the lowest rate possible for you to choose from under no obligation. Always keep in mind to compare your options before you settle.

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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.

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