Equipment Finance and Finance Management
Equipment finance is one of the most effective ways through which you can get assistance for your equipment. There are various reasons to go for equipment finance. Often, you may need equipment but not have the money to for it completely.
In such cases, you’ll need a convenient finance broker through which you can get a loan and repay the amount you owe over a period of time. This way, you can get your equipment without breaking the bank. This is one of the reasons many people use brokers for the best equipment finance deals.
Equipment Loan and Chattel Mortgage in Australia
In the Australian business landscape, two prevalent methods of financing equipment needs are through Equipment Loans and Chattel Mortgages. Each of these financing options operates differently, and the choice between the two hinges on your specific requirements and intentions for the equipment.
Equipment Loans are a favoured choice for many Australian businesses. These loans are typically offered at moderate rates, making them a more appealing alternative to traditional bank loans, which can often be inflexible and come with high-interest rates. Equipment loans are generally provided by third-party companies at lower rates, which are designed to remain manageable and affordable.
One of the key advantages of an equipment loan is the flexibility it offers in terms of repayment. The repayment period is mutually decided, ensuring that it not only serves the interests of the financiers but also aligns with your business needs. This flexibility and convenience have led many Australian businesses to acquire their equipment through equipment loans, enabling them to obtain the necessary equipment without a hefty upfront cost.
What is Chattel Mortgage? A Chattel Mortgage is another form of equipment finance that offers you complete ownership of the equipment. Under a Chattel Mortgage agreement, the financier lends you the capital required to purchase the equipment outright. The amount to be lent is determined based on the market price evaluation of the equipment, and you are expected to repay this amount over an agreed period.
Upon the purchase of the equipment, it falls under your responsibility, and the ownership is fully transferred to you once all outstanding amounts have been paid. Unlike leasing, there are no restrictions on how you use the equipment under a Chattel Mortgage. This makes it a popular choice for businesses that prefer to own the equipment outright and potentially claim tax benefits associated with depreciation and interest expenses.
In conclusion, if your business is seeking equipment ownership and the freedom to use the equipment to serve your specific needs, options like Equipment Loans and Chattel Mortgages are worth considering. The programs offered by our partners are designed to provide you with convenient repayment periods. Our team of experts will customise the program specifically to meet your needs. In the realm of equipment finance, there’s no such thing as a one-size-fits-all solution. Each program is tailored based on the unique needs of each participant, ensuring a personalised and effective approach to equipment financing.
Equipment Finance Calculator
You’ll need to calculate your total cost incurred and the amount to repay. An equipment finance calculator is the most effective way to do this. With your calculator, you can calculate the amount you’ll pay back with relevant market rates. These calculators are designed to reflect market-relevant inputs and help you determine all necessary costs. It’s also a perfect way to keep track of your payment.
You’ll need to familiarise yourself with the finance calculator so you can stay updated with your repayment schedule. Also, it helps you to know the amount you’ve paid and the amount you have left.
An equipment loan calculator is relevant because it’s a smart way to pre-calculate your loan. This will save you from surprises and ensure that you are updated with all relevant information. Most people jump into loans without doing adequate research on the procedure, interest rates, and other relevant factors.
More so, getting the equipment loan you’re applying for is largely determined by pre-calculating your loan. Financial institutions will loan you money only if you have the repayment capacity.
Personal Finance
Managing your finance and budgeting towards your equipment is important. You’ll need to give relevance to financial management for you to successfully make smart financial choices. An effective way to do this is to budget based on your needs.
Consider why you need equipment and the set of equipment within your budget range. This will help you make important financial decisions without breaking the bank. Effective financial management will help you achieve what you need within a reasonable period.
So, when you calculate your loan beforehand, you get to know the kind of equipment you can buy and which you’ll get a loan for. Therefore, it’s crucial that you calculate your loan beforehand and consider all necessary factors. Here are some things financial institutions will consider.
Loan Amount
This refers to the loan you intend to get. How much are you borrowing from the financier? The bank will consider this amount in relation to the security you have or your credit rating. This is what makes credit rating important to your equipment finance because your financier wants to know whether you have been dutiful to your financial obligations.
Your loan amount will depend on your credit rating and the equipment you’re getting. This is why you need an equipment finance calculator. With the calculator, you get to know the possible loan amount you need to get a particular piece of equipment. This doesn’t mean that your financier will offer you the exact amount you need. Offering you your desired amount will depend on the loan packages offered by your financier and how strong your credit rating is.
Credit rating refers to how faithful and dutiful you have been with your outstanding financial obligations. If you have been borrowing money, it is crucial that you always payback. Not paying back or delaying payment will read badly on your credit rating report, and this will affect your credibility before your financier.
As such, you should get your credit rating report from the relevant agency and assess whether you have gaps in your rating or whether you’ve truly satisfied all payments. If there are gaps, you should make moves immediately to cover the gaps, as this will mitigate your issues before your financier. However, suppose you have a quality credit rating, the chances are high you will get the loan amount you need because a quality rating means you are dutiful when it comes to your payments.
Interest Rate
This is the rate which the financial institution will charge over the repayment period. You’ll need to consider the interest rate. Know that the higher the interest rate, the longer the repayment period. So, consider this when making your calculation and budgeting towards your equipment.
When you consider the interest rates, you get to know whether to go for the package or not. Many people have gone into deals with interest rates that do not favour them in the long run. You should always deal with finance providers with the best interest rates that will serve you over the repayment period without breaking your back.
Repayment Period
This is the period where you repay the amount you loan with the interest rate. It’s important you consider this because the period needs to be convenient and fit into your financial schedule. The repayment period is one of the most important things when considering equipment finance. You don’t want to get equipment and start struggling with payment. As such, it’s advisable that you negotiate fair repayment periods that will serve your needs. Most quality equipment finance schemes will offer you excellent repayment periods with moderate interest rates over the period it lasts.
Considering these measures and calculating your loan beforehand will help you determine what package to go for. This way, you can rest assured you’re making the right choice that will serve your needs.
You can use a broker
One thing to consider when getting equipment finance is to go through a broker or an equipment finance expert. These experts have the experience and expertise to negotiate fair deals and ensure that you get excellent schemes that will serve your needs.
These brokers also have experience in the market, and they have been operating for a long period. As such, many of them have a network of financiers they can leverage to get you the best equipment finance deals. So, it’s often advisable to go through an expert to serve your needs. This also saves you the trouble of having to stress over negotiation and all that.