What is Equipment Finance?
Obtaining equipment is one of the most common reasons business owners seek financing. Everything from computers and desks for an office to farm equipment and heavy machinery
Businesses commonly get equipment financing in these situations:
- You need expensive equipment, but can’t afford to (or don’t want to) purchase that equipment up-front,
- You need to replace your equipment frequently because it has a short lifespan or you always need the latest in technology, or
- a combination of the above
What finance options are available?
Through an assessment of your specific business requirements, we provide you with a range of alternative finance options to suit individual needs. This could be through a chattel mortgage, lease, rental or design flexible repayment plans for commercial hire purchases to help make your funds go further.
1. Chattel Mortgage -
- Similar structure to a fixed rate traditional home loan or mortgage
- Car or equipment is used as security for the loan
- Chattel refers to the car or equipment and mortgage refers to the loan
- You take ownership of the asset right away
- Most commonly used if you need to trade out equipment frequently or don’t have the capital to pay the down payment required for a loan
- Instead of borrowing money to purchase the equipment, you’re paying a fee to borrow the equipment.
- Leasing company technically maintains ownership of the equipment, but lets you use it
- Financier buys the equipment on behalf of the customer and rents it to them for fixed payments over a fixed period
- At the end of the contract you either hand back the equipment, continue the rental agreement or buy the equipment outright at market value