Quick Guide to Equipment Finance Options in Western Australia

Many business owners rely on commercial equipment finance to fund the purchase of expensive equipment. Establishing or upgrading a business can be a costly venture. Even profitable businesses may be reluctant to tie up their capital in a new purchase and leave themselves vulnerable to changes in the economic climate and finance difficulties in the future. However, with equipment finance, the company can budget the monthly cost and ensure the liquidity of their cash flow. Equipment Finance Providers: Although your high street bank may offer business loans, there are a number of specialized lenders offering equipment finance and commercial equipment finance deals. There are a number of different finance options and each lender may specialise in a particular niche. While it may be tempting to try and save a few dollars on their equipment finance, Perth business owners are likely to find this a tedious and time consuming task. It can be a far better idea to work with a broker, who already has relationships with a number of specialist lenders. In fact, often these lenders offer exclusive deals to the broker for their clients. The broker can assess your requirements and assist you in finding the lender best suited to meet your needs.
 Typical Terms of Commercial Equipment Finance: The specific terms will depend greatly on your particular requirements. Some lenders offer short term loans, but for this significant a purchase, you will likely be offered a loan term of five to ten years. Some companies even offer longer terms. There may be a requirement for a balloon payment at the end of the finance term, but this will depend on the specific terms of the agreement. This type of balloon payment typically requires that you use a cash payment or refinance to settle the loan balance. There are also short term options with commercial bridge loans. These are typically easier to secure and allow you to borrow up to 65% of the equipment value. However, this type of loan can be a viable alternative if you are expecting a large payment from a customer in the near future.

 Penalties and Fees: Again, this will vary according to the specific terms of your loan. You may find that there are early repayment fees applied to the loan, should you find you are able to settle the loan before the end of the term. These are often a percentage of the loan balance, so they can be quite costly. If early repayment is a possibility, you should look for finance options with low or no early repayment fees. Additionally, you should check the other fees or charges which may apply to your loan. For example, although you will aim to make your payments on time each month, there may be occasions when you are a little behind. In these instances, are you going to be hit with a big late repayment charge? It is worth comparing these terms when you look at the different deals on offer. You may regret saving a few dollars on a finance package if you find fees and charges increase the total cost in the long term.  If you are considering equipment finance Perth business owners should contact us. We specialise in equipment finance and would be happy to assist you in finding the deal best suited to your specific needs.