According to the Australian Bureau of Statistics, 2016 showed an unprecedented rise in the number of businesses. Thus, last year alone 21.000 businesses were added to those in the previous years, 2014-15. The surge is indeed great. When you take into consideration the plethora of companies scattered all across Australia, you can well imagine how many of them are or will be in need of equipment financing.
What is “equipment finance” and why would I be interested in it?
Equipment finance allows you, as a business owner, to lease or rent new equipment (IT, vehicles and specialised machinery) for your business. It’s very helpful to new businesses especially, since the owners won’t have to invest their capital in purchasing equipment. This can make the difference between survival and bankruptcy.
Let us take a look at the advantages of equipment financing.
You can save money
Purchasing all the equipment with money outright can bleed your capital dry in a record time. When a business is new on the market, the owner must do everything that needs to be done in order to protect his capital. When you rely on equipment financing, you get financial help, so your capital remains safe and sound.
Flexibility in repayments
Whenever you consider applying for an equipment financing program, you must take a look at your cash flow first and foremost. You have to plan a repayment schedule with your lender according to the said cash flow. Most of them will even adjust the repayments in concordance with the periods during which your business makes most of the sales. Summer, for example, but not necessarily.
Technology evolves with a speed that renders business equipment obsolete in the blink of an eye. It is extremely important to keep up with the latest technology and make sure that it will last you for a good number of years. One of the reasons why businesses die is that they have outdated IT products and machinery that aren’t efficient and viable anymore.
Uninterrupted business cycle
Equipment finance keeps the business cycle steady, regardless of the season. It is a direct consequence of repayment flexibility. During the seasons when sales decrease, you will make lower repayments; in contrast, when your sales increase, you will make higher repayments. It’s only natural.
When you apply for equipment finance, you will get constructive pieces of advice from specialists in the field, to make sure that you make the decision that suits your business best.
In lines with research conducted by East & Partners, 61.6% of equipment financing comes from brokers. This serves to show how many businesses are in need of financial help in respect with purchasing new equipment. If you are a new addition to the business landscape, you will come to see how useful and efficient these programs are. Businesses are difficult to be kept on track these days, so this is a much-needed helping hand. Did you ever finance your equipment? Do you have any plans of doing so?