5 things to consider when hiring heavy equipment for your business

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.
Our authors

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

1. Maintenance costs

Purchasing heavy equipment is a costly affair that can blow a hole in your cash flow if not budgeted for. It pays to look beyond the price tag of heavy equipment to see if you will be able to afford the maintenance costs. Hiring heavy equipment can be beneficial when it comes to finding something that is cost effective as you won’t have to handle the maintenance costs. It will also make sense for seasonal businesses to hire than to purchase their equipment.

2. Does it come with options?

One thing to consider when looking for a finance option that suits your business is to check if it will be able to cater to your businesses needs. If you need to keep your equipment constantly updated to help you carry out operations, then it is vital to check if your finance option allows you to do this. Hiring comes with the benefit of being able to update your equipment every 3-5 years, giving you access to the latest models without footing a hefty bill for the upgrade.

3. Do you have storage space?

Plants require that you have enough storage space. For businesses that are still starting and have a tight budget, this could be an issue. If this is the case hiring your equipment can be the way to go as it can come with the flexibility of having space where the equipment is stored for you at no additional cost.

4. Taking out a loan to finance equipment

Start-up capital and cash flow can be two of the major concerns many businesses in Australia face. Therefore, choosing a finance option that can give you that boost needs to be carefully considered. You can get access to a commercial loan to help cover the cost of hiring equipment, but it is vital that you check the features of the loan such as its establishment fees, interest rate, ongoing fees, and penalties for paying the loan off early. Using a loan calculator can help you know how much your monthly repayments will be and the interest you will be paying over the course of the loan.

5. Potential tax benefits

Checking what tax benefits are applicable to your business, especially if you will be hiring is essential. There may be a limited amount of tax benefits that you will be able to claim when it comes to hiring equipment since the machinery expenses will not be kept on your books. However, you may be eligible for fuel tax and interest on the loan that they use to hire the equipment. Not all business will receive the same tax benefits as the next which is why you need to speak to an ATO officer or a qualified accountant to see what tax benefits will be applicable to your situation.

Did you find this page helpful?

Thanks for your feedback!

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.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a commercial loan quote?

Compare with Savvy and save on your next commercial loan.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Looking for a commercial loan?

All equipment, aircraft, technology, agriculture, plant & machinery and truck finance. See how you can compare and save with us.

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.