Equipment Finance Archives - Dark Horse Financial

Equipment Finance Options in Australia

23 April 2024 / Commercial Lending, Equipment Finance

Key Takeaway Table Key Point Description Definition Equipment financing is a range of financial products that enable businesses to access essential plant & equipment. With equipment financing, businesses can get any equipment, from computers to heavy machinery, without paying upfront. Benefits of Equipment Financing Equipment financing offers several benefits for businesses. It provides immediate access to necessary equipment that can improve capability and efficiency. Equipment finance is available to start-up businesses, allowing small businesses to acquire assets without depleting their funds. Financing also preserves working capital for daily expenses and can bring tax benefits. Equipment Finance Options A popular option among businesses is a chattel mortgage, where the buyer is considered the owner of the equipment at the time of purchase- this works like a secured loan. Borrowers can also opt for lease finance, which allows them to purchase the equipment at the end of the term, or an operating lease, and there are also rent-to-own equipment finance options. Key Considerations Before Applying for Equipment Finance It’s crucial for businesses to consider the purpose of the equipment, its total cost, and its expected lifespan and viability. Businesses must also review the different types of financing and their terms and conditions to find the ones most favourable for them. Nearly all businesses will need some type of equipment to operate, which can be anything from computers to large freight vehicles. No matter how many or what type of equipment you need, securing funding can be a challenge. With equipment financing, you can get the funds you need so you can immediately have access to equipment and begin business operations. What is Equipment Finance? Equipment finance refers to a range of financial products designed to help businesses acquire the equipment they need to operate without needing to pay upfront in full. This type of financing is used to purchase or lease various types of equipment, such as machinery, vehicles, technology, and other assets. Benefits of Equipment Financing Financing Can Help You Get Access to Equipment Immediately. If you plan to pay for equipment without financing, it may take time for you to get the funds you need, which can hamper your business operations. With equipment finance, you can access the equipment you need right away without shelling out a large sum to pay in full. Equipment Finance is Start-up Friendly. For startups or small businesses with limited capital, equipment financing can be a great way to acquire necessary assets without depleting resources or taking on excessive debt. Equipment Finance Helps Preserve Capital. You can preserve working capital for pressing daily expenses and other areas of operations rather than tying it up in equipment purchases. You Can Get Access to Latest Equipment. Leasing options enable businesses to upgrade to the latest equipment more frequently, which is particularly beneficial for rapidly evolving industries. You Can Enjoy Tax Benefits. Depending on the finance option chosen, businesses might be able to claim tax deductions. Specific benefits depend on local tax laws and the structure of the finance product. Equipment Finance Options Businesses looking for equipment finance options have a variety of choices to consider, catering to different needs and preferences. Here are some common types of equipment finance available: Chattel Mortgage: This is a popular option where the borrower takes ownership of the equipment at the time of purchase. The equipment itself serves as collateral for the loan. Finance Lease: In this arrangement, the lender owns the equipment and rents it to the business for a fixed period. At the end of the lease term, the business may have the option to purchase the equipment, extend the lease, or return the equipment. This option allows businesses to use the latest equipment without the upfront cost of purchasing. Operating Lease: Similar to a finance lease, but typically for a shorter term. The business does not have the option to purchase the equipment at the end of the lease. This option is suitable for equipment that may become obsolete quickly, as it allows businesses to upgrade to newer technology more frequently. Hire Purchase: The business hires the equipment from the lender and makes regular payments with the intention to purchase the equipment at the end of the agreement. The business becomes the owner of the equipment upon making the final payment. This option often includes a balloon payment at the end of the term to reduce monthly payments. Navigating the Application Process for Unsecured Business Loans Before applying for equipment finance, it’s crucial to thoroughly assess your business needs and financial health. This preparation can help you make an informed decision and choose the best financing option for your business. Here are some essential questions to ask yourself: What is the purpose of the equipment? Assess how the equipment will be used in your operations. Is it essential for your business, or can the purchase be delayed? Understanding the equipment’s role can help you justify the financing cost. How will the equipment benefit my business? Consider the potential return on investment. Will the equipment increase efficiency, reduce costs, or open up new revenue streams? It’s important that the benefits outweigh the costs of financing. What is the total cost of ownership? Beyond the purchase price, consider maintenance, operation, insurance, and any other ongoing costs. Evaluating the total cost of ownership will give you a clearer picture of how much the equipment truly costs overall. What financing options are available? Explore the different types of equipment finance available. Each has its advantages and disadvantages, depending on your situation. If you’re unsure, you can always turn to loan experts to help you make an informed decision. What are the terms and conditions of the financing? Carefully review the interest rates, repayment terms, down payments, and any fees or penalties for early repayment. These factors will affect your overall cost. Can my business afford the repayments? Analyse your current cash flow and forecasts to ensure you can comfortably meet the repayments. Consider

Financial expert informing client on ways to finance a fit-out

Blog, Equipment Finance

7 Ways to Finance Your Fit-Out

11 March 2024 / Blog, Equipment Finance

Key Takeaways of How to Finance Your Fit-out Key Point Description Internal Funds Using your company’s internal funds is the most straightforward way to finance your commercial or industrial fit-out. However, consider whether your cash reserves are enough for the project. Operating Lease Agreements Renting or rent-to-own agreements for industry-specific equipment or office furniture can be a cost-effective strategy for your fit-out. Equipment Finance This financing option provides funding for asset purchases like machinery and manufacturing equipment, with some solutions willing to finance a fit-out project’s soft costs, too. Property Remortgage or Cash-out Refinancing Accessing home equity through refinancing may provide cash for fit-outs. Second mortgages can also be an alternative for additional funding. Secured or Unsecured Business Loans Traditional banks and private lenders offer loans with or without the need for security, catering to different business financing needs, including funding an industrial facility or office fit-out. Fit-out Incentives Some landlords may offer contributions towards fit-out costs as an incentive for securing long-term commercial tenants. Fit-out Finance Fit-out finance is a specialised business loan for commercial fit-outs that allow for immediate project commencement, with repayment spread over a number of years. Whether your business is on the move, expanding or simply starting, your next step is to secure a new space and customise it to suit your operational needs. While this phase is exciting, it also undoubtedly demands a considerable chunk of your working capital. In this guide, we’ll cover the different ways to finance your fit-out. Internal Funds The most straightforward way to finance your new office or industrial shop fit-out is to use your company’s internal funds. You can allocate funds from your cash reserves or pool of money dedicated to future investments. But while this method grants you full control over funding your fit-out, be sure that your internal funds align with your fit-out’s scale and requirements. If you want to keep your working capital or cash reserves intact for other business expenses, consider one of the options listed below or a hybrid of using cash & other available funding methods. Operating Lease Agreements Does your growing business need expensive, industry-specific equipment to operate daily? Or do you simply want to upgrade your equipment during a fit-out project to expand your operations or scale your productivity? In these arrangements, you essentially rent or (rent to own) industry-specific equipment and/or office furniture at a potentially lower cost. Equipment Finance Looking for loans that are more suitable for your fit-out project? Explore equipment financing. It provides funding for asset purchases like machinery and manufacturing equipment, with some solutions willing to finance a fit-out project’s soft costs, too. Unlike operating lease agreements that are focused on letting you rent the equipment at a lower cost, equipment financing allows you to own the equipment outright and pay off the purchase over the agreed-upon loan repayment term. Some lenders may have limits on the age of assets they are willing to finance, but others do not. Make sure to find the solution that best suits your needs—whether you plan to equip your space with new or used equipment. Cash-out Refinancing You can refinance your property to secure cash-out to fund your fit-out. A second mortgage is another possible financing solution secured by property for your commercial fit-out – it’s a totally separate loan from your first or existing mortgage. Secured or Unsecured Business Loans Both secured and unsecured business loans can offer adequate funding for your fit-out project. Secured business loans require an asset as security, such as property or equipment. Unsecured loans do not require business assets as security. Fit-out Incentives Did you know that some landlords may be open to funding your fit-out? Some landlords offer fit-out contributions as an incentive to attract long-term commercial tenants. Fit-out Finance Fit-out finance is a specialised business loan designed specifically for undertaking commercial fit-outs. This type of financing may cover both the tangible & intangible items of a fit-out project. The advantage of securing a fit-out loan over other options is that it enables the immediate completion of all necessary works, with the repayment spread over a certain period (for example, four to five years). Be sure to engage with lending experts who specialise in fit-out finance because they understand the intricacies of the fit-out process. They can help you find lenders that offer fit-out financing solutions that can be tailored to your specific needs. Let Us Help You Decide At Dark Horse Financial, we have years of experience helping Australian businesses acquire the funding they need to run and grow their companies. Whether you’re seeking expert guidance in office fit-out finance or looking for specialised loans to equip your facility with industry-specific machinery, we’re here to help. Count on us to help you decide and pick the best method to finance your fit-out project. Speak with one of our loan experts today to get started. Contact Us Here

Blog, Cash Flow Lending, Equipment Finance

Maximising Business Potential: Asset Based Loans in Australia

4 November 2023 / Blog, Cash Flow Lending, Equipment Finance

Securing a loan that aligns with your business’ operational needs and long-term goals is a key strategy to maximise opportunity, investment in your business and cash flow financing. Asset based lending, as distinct from Unsecured Lending, is a broad term for a variety of loan and security types. This form of lending empowers business to leverage their physical assets to obtain the funding you require for your business to thrive. Whether it’s to meet day-to-day operational expenses, fund commercial property purchase, equipment or machinery finance, support expansion into new opportunities and markets, or navigate through a financial rough patch, asset based loans can be a catalyst to propel your business forward. APPLY NOW Key Takeaways of Asset Based Loans Key Points Description What is Asset Based Lending? A loan secured by an asset(s) such as property, equipment & machinery, accounts receivable, etc. Who Can Benefit? Businesses in need of working capital, or those looking to expand. Why Choose Asset Based Loans? Provides a flexible financing solution with typically lower interest rates than unsecured loans. How to Get Started? Engage with a financial service provider to match your needs with the right loan option. Understanding Asset Based Lending Asset based lending is a financing solution where the loan is secured by assets. These assets could range from accounts receivable, inventory, machinery, to real estate. Essentially, the physical assets act as security for the loan, which typically results in lower interest rates compared to unsecured lending solutions. The value of the loan is often determined by the value of the assets being leveraged. Various types of assets can serve as collateral in asset based lending, each with its inherent advantages and considerations. Vehicles, plant and machinery assets can be used to secure business loans with terms typically around 5 years. Property can be used to secure commercial bank funding, loans from fintech’s and even loans from private lenders who offer first and second mortgages. Benefits of Asset-Based Loans for Businesses Working Capital One of the most compelling advantages of asset based loans is the provision of working capital solutions. Businesses often find themselves in need of immediate funds to cover daily operational expenses such as payroll, utilities, or supplier payments. Asset based lending provides a solution to working capital challenges, enabling businesses to meet these obligations promptly. Business Growth Few activities can starve business cash flow like a growth strategy where businesses usually need to invest in people, technology and infrastructure before seeing a return. Asset based loans can provide the necessary capital support to fuel business growth and expansion. By accessing capital tied in assets, businesses can invest in new ventures, increase inventory, or expand into new markets. Asset-Based Loans Application Process The application process for an asset based loan is largely determined by the type of loan you’re applying for and the kind of asset based lenders you select. Case study: $600k capital raise for a competitive advantage (equipment assets as security) Our client had purchased manufacturing machines at auction they knew they could repurpose and create a product they needed to previously import from overseas. This equipment, once operational, provided the capability as the only producer of this product in Australia and would give them a competitive advantage. Requiring $600,000 to bring the assets online the business owner had been told by a previous expert they would need to put the family home on the line to raise the level of capital required. We could see a business finance solution that didn’t require property. Looking at the business owners asset register we were able to raise $600k against their existing machinery assets using forecasted earnings to demonstrate serviceability. It was a great outcome that significantly strengthened capability and brought an exciting project to reality for our client. Work With An Expert for your Asset Based Loan Asset based loans present a viable and often beneficial business finance solution for many businesses. By leveraging assets, business owners can unlock essential capital to keep operations running smoothly or to invest in growth opportunities. The flexible nature of asset-based lending, coupled with typically lower interest rates, make them an attractive option for business growth. To work with an expert for your asset based loans contact us here.

Blog, Equipment Finance

Beyond Truck Finance – Business Loans for Trucking Companies

7 August 2023 / Blog, Equipment Finance

Key Takeouts – Beyond Truck Finance: If you’re leading one of the many established trucking companies in Australia, you no doubt know your way around truck loans and the asset finance lenders who assist the transport industry with the trucks and trailers you need. You could even have an equipment finance master limit that gives you a revolving line of credit to help acquire and manage your assets without having to get individual approval each time you’re funding a new vehicle. But there’s more to running a transport and logistics business than getting truck finance – you need to be able to manage cash flow, make sure subcontractors and suppliers are paid on time and deal with ATO tax debt. Beyond truck finance, in this article, we’ll step into the different forms of finance for trucking companies. Business Loans for Trucking Companies Cash Flow for Trucking Companies Cash flow is important to all businesses but trucking companies need constant positive cash flow to keep freight and people moving. Every operator in the transport industry in Australia knows the high cost of fuel, maintenance, tolls, licensing and insurance. With these costs and others placing pressure on margin it’s important that any business loans are designed to support your transport industry business in the best possible way. Successful trucking companies often have some of the best processes around invoicing we see and many manage their assets movements like a skilled tactician but even experienced business owners need working capital support from time to time. These working capital solutions are designed to keep your cash flow positive. Finance for truck companies – GET A QUOTE Trade Finance to pay subcontractors to Trucking Companies Trade Finance is a line of credit designed to facilitate trade between businesses. True trade finance is used to pay domestic suppliers and Import finance – which is another form of Trade Finance – can be used to pay overseas suppliers. While paying domestic invoices and paying subcontractors in particular is a more relevant need for most trucking companies, Import Finance can be used to fund the import of equipment and machinery that might not be available in Australia. The features of Trade Finance are a line of credit with a pre-approved limit that is used to pay supplier invoices. Depending on your facility you might then have 90 – 210 days before paying back the trade bill. The benefit of a Trade Finance facility is it can pay for your inputs while you wait for customers to pay your invoices, which is a direct benefit to cash flow. Overdrafts for Trucking Companies Overdrafts are a line of credit up to a pre-approved limit that can be relied upon when you need extra working capital to manage day to day expenses. Overdrafts can be secured by property or they can be unsecured. In the case of an unsecured overdraft a security position will often be taken over the company and directors will provide personal guarantees. There is a misconception it’s only possible to have small unsecured overdrafts limits but at darkhorsefinancial.com.au we’ve successfully obtained unsecured overdraft limits over $1M for clients. Invoice Finance for Trucking Companies Invoice finance is a line of credit secured by your accounts receivable ledger. In practical terms this means if you’ve completed work and issued an invoice to your customer, you can claim against the value of your invoice – usually up to 80% or 85% of the invoice value. It’s important to gain advice from an expert as invoice finance providers have a large variation in fees and interest rates. There is invoice finance for trucking companies without service fees linked to turnover and with low rates that link to your accounting software making them user friendly. Invoice finance can be a high touch solution so we recommend business owners consider the service levels of an invoice finance lender and how they manage historical disputes. If you’re not sure how to gain this information we recommend you use an experienced invoice finance expert. Truck Finance for Startups Despite what you may have been told by your bank, truck finance for start-up trucking companies does exist and there are even rent to buy options provided you can demonstrate proof of income to make repayments. We’ve successfully obtained truck loans for start-up trucking companies using cash flow forecasts and a deposit. It’s also possible to obtain working capital for start-up businesses using private lending. Bad Credit Truck Financing Again, despite what you may have been told, there are bad credit truck financing solutions available. Bad credit truck loans are more expensive but if you have the work to support repayments there can often be an overall benefit. The key is to complete a cost benefit analysis to make sure you’re improving your situation by going ahead with a bad credit truck loan. Putting It All Together – Navigating Trucking Finance Financial stability isn’t just about the initial investment or acquiring your fleet. It’s about maintaining a continuous flow of resources, meeting day-to-day operational costs, and ensuring you can weather any financial storms. As we’ve covered, the importance of cash flow and maintaining a healthy margin cannot be understated – it is the lifeblood of a business and is pivotal to ensuring longevity and sustainability. Trade finance is a strong tool for trucking companies, enabling you to pay subcontractors and suppliers promptly, further cementing trust and reliability in business relationships. Whereas business overdrafts play a critical role in helping you navigate routine expenses, from settling bills to meeting payroll obligations. The right (and we stress the right) invoice finance solution can be a game-changer for many. By allowing you to draw on your invoices early, it offers a robust solution to potential cash flow gaps. But it’s crucial for trucking businesses to understand this equipment finance solution – for instance, how invoice financing at major banks differs considerably from other providers, often resembling more traditional overdrafts. For those just starting out or those facing financial challenges,

Equipment Finance

A Guide To Machinery Loans to Improve Business Finance

26 June 2023 / Equipment Finance

At Dark Horse Financial we’ve helped manufacturers, engineers, construction business owners, even robotics businesses and many more purchase machinery for their business using machinery loans. The benefits of owning the machinery your business uses on a regular basis are significant. Machinery can bring in an income and create operating efficiencies. Owning machinery is cheaper than frequently used rental equipment. You can engineer machinery to your specific production requirements, you can build equity on the balance sheet and the list goes on. However, machinery finance isn’t always as straightforward as say getting finance for a vehicle. Many lenders demonstrate a preference for financing assets with wheels and their policies often don’t extend to the specialised machinery that many business owners need. As well as this, many lenders won’t provide finance for second hand or older equipment, even when it has lots of useful life still in it. The purpose of this article is to provide a guide to machinery loans for business owners in Australia. We’ll explain how machinery loans differ from other business finance, cover the differences between primary, secondary and tertiary equipment, and the importance of lender selection for financing second hand equipment, specialised equipment and older equipment. Get a quote for your machinery loan Key Takeouts: What is a machinery loan? A machinery loan is a loan used to purchase machinery under a chattel mortgage which is the finance term applicable to most machinery loans. The machinery asset is normally security for the loan making them a secured form of business finance. Because machinery loans are a type of secured business loan they typically have lower rates than unsecured loans. For this reason, it’s important to use a lender who offers equipment finance and not just unsecured loans when acquiring assets so you don’t pay more interest than you need to. Because the machinery is used as security for your loan, property security isn’t required for machinery loans like it is with other forms of commercial lending. Loan terms typically extend to 5 or 7 years making monthly repayments lower and more easy to manage than loans with shorter terms, like what you might find in private lending including second mortgages. The benefit of a machinery loan to business owners is they allow you to pay off your machine over a number of years in equal instalments. Spreading the purchase cost of your machinery over time enables you to earn income from your machine or gain the benefit of the operating efficiency it provides which in turn helps your business to grow and become more productive. Chattel mortgages are a common form of finance for purchasing assets, particularly cars, trucks and trailers. Many equipment finance lenders prefer vehicles as they see them as lower risk and they might not have the knowledge to understand machinery. For this reason, selecting the right lender for your machinery loan is an important part of getting approved. In addition to having asset preferences, lenders also have industry preferences. To have the best chance of a loan approval make sure your chosen lender supports your industry and has a track record of approving loans for machines that you’re interested in. Machinery Loan Application Process The machinery loan application process depends on which lender you match up with the best. If you’ve been in business for more than 2 years and your credit score is in reasonable shape, we have no doc application machinery loan solutions for finance up to $500,000. This kind of assessment is normally completed by a read only assessment of bank data which makes an approval outcome possible within hours, rather than days or weeks. If you’re a startup business or applying for a larger limit, applications are likely to be a full-doc application process that involve providing financials, ATO portal information and a cash flow forecast. For startup businesses the cash flow forecast is particularly important as the cash flow forecast demonstrates your ability to service the loan. Once approved, settlement for machinery loans can occur very quickly so you can have your machine working for your business fast. Machinery Loans For Second Hand Equipment and Older Machinery Lenders have different policies related to financing assets for your business – some lenders are only interested in financing vehicles or assets that are new, or purchased from a dealer. For this reason, if you’re seeking a loan for second hand equipment or older machinery it’s important to know your chosen lender supports applications of this type. An experienced machinery loan expert can guide you to the lenders who support finance applications for older equipment. Machinery Loans For Specialised Assets Lenders often split up assets being financed into categories of primary assets, secondary assets or tertiary assets. Primary assets will typically be identifiable by vin and engine numbers and have broad resale value. Some examples of primary assets include vehicles, trucks, forklifts and earthmoving equipment. Secondary and tertiary assets are considered more specialised and won’t always have serial numbers. Examples of secondary and tertiary assets include manufacturing machines, engineering and tool making equipment, earth moving attachments and pallet racking. The lenders who support machinery loans like specialised equipment defined as secondary and tertiary equipment often focus on finance for B2B industries and also offer invoice finance and trade finance lines of credit. We’ve had success funding specialised machinery with these lenders even after banks have said no. Equipment finance bad credit solutions can also often be found with these lenders who provide finance for specialised industry machinery. Work With An Expert Machinery Loan Broker And Gain A Competitive Advantage Understanding machinery loans can assist a strategic approach to business growth and efficiency with adopting asset financing solutions. These loans offer a viable avenue for businesses to acquire essential machinery, including specialised equipment, that may not otherwise be within immediate financial reach. As we’ve noted, factors like lenders’ preferences for certain types of assets, age of equipment, and the state of your credit are all important factors in choosing the right

Business people shaking hands during meeting at modern office

Blog, Equipment Finance, Private Lending

How to Get a Loan for Business

23 June 2023 / Blog, Equipment Finance, Private Lending

Getting business financing right is an important part of managing your business. If you’re a start-up business or have tax debt, it’s no good going to a major bank to seek a business loan when their credit policy requires two years of financials and no money owing to the ATO. Getting the right loan for business comes down to matching your business circumstances with the right lender for your industry, your loan purpose and the speed you need your solution. With so many bank lenders, non-bank lenders, working capital specialists, private lenders and Fintechs making up the lending market it can be hard for business owners to work their way through the various lender policies, industry preferences and navigate lender process. In this article we’ll explain how business financing differs from consumer lending, lift the lid on different business loan types and their application process, and include essential information for startup business loans. After reading our article you will better understand business lending and be able to identify which type of loan suits your business needs. Get a loan for your business How is a Business Loan different from a Consumer Loan in Australia? Consumer loans are covered by the National Consumer Credit Protection Act 2009 (NCCP) and can be for any personal or domestic purpose, including home and investment lending. The NCCP aims to promote responsible lending and obligates lenders to make reasonable inquiries about a consumer’s financial situation and requirements. Consumer loan terms and conditions usually have a section requiring borrowers to declare the loan is not for business purposes. A business loan is a loan that is specifically for business purposes – business loan contracts and terms will include a declaration the loan is for business purposes only. Accordingly, the NCCP does not apply to business loans and many lender’s loan contracts will make the point that by signing a business loan contract the borrower agrees the NCCP does not apply. In addition to the differences in regulation, in real terms business loans are more flexible than consumer loans and there are many different types of loans designed to support the varying needs of business. Loan application processes vary between different lenders and reflect a lender’s risk appetite. Whilst business loan regulation does not have the same protection afforded consumers under the NCCP, business owners can access more different forms of finance. Types of Small Business Loans Small business bank loans include an ANZ business loan, NAB small business loans, Westpac business loans and Commbank business loans. Business bank loans for small business lending tend to have the broadest kinds of loan facilities and with the lowest business loan interest rate. The application for business loans for small businesses is often a full-doc application and can take from 2 weeks to 2 months depending on the complexity of the loan. Loans Secured and Unsecured: Both of these loan types are typically term loans. The main difference between secured and unsecured loans is if the lender requires security. Loans can be secured by property or other assets like vehicles, machinery or your accounts receivable. An unsecured loan relies on a personal guarantee from directors, the business itself and does not require security in the form of property. For this reason, unsecured loans have smaller limits although loans of $1M and even $2M on occasion can be sourced. Secured loans of up to $50M are not uncommon and can be higher still if a borrower’s circumstances and security warrant a loan of that size. Application processes for secured and unsecured loans can vary depending on the lender but an increasing number are completed through the analysis of a read only bank link from business bank accounts. This makes for a fast approval and many lenders can settle within 24 hours. Lines of Credit: A business line of credit works in a similar way to a credit card. Businesses can draw on their line of credit, often a business overdraft, up to a predetermined limit. A business line of credit could be secured and there are also unsecured overdrafts. The benefit of a line of credit is the cashflow support it provides business. They’re also ever green because as funds are paid down, the credit becomes available again up to a borrower’s predetermined limit without having to make a new application. Applications for unsecured overdrafts with limits up to $500,000 can be completed without documents at some lenders and are normally assessed and settled within 24 hours. Bank lines of credit normally take a few weeks to be approved and set up but can take longer depending on the applicant’s circumstances. Equipment Finance and Machinery Loans: Equipment finance and machinery loans are loans for business assets. The kinds of assets covered by these loans are broad and relate to any business equipment. Common assets purchased with equipment finance include vehicles, trucks, trailers, construction and manufacturing equipment but also can include very specialised equipment as well. Equipment finance and machinery loans are normally paid back over 4 or 5 years and are secured by the assets related to the loan. Because equipment finance and machinery loans are secured they usually have lower interest rates and fees than unsecured loans. Loan applications for equipment finance can be full-doc applications or no-doc applications depending on how long you’ve been in business, the type or age of equipment you’re funding or the lender’s policy. Some of our lenders have no-doc equipment finance applications up to limits of $500,000. Private loans: Private lending involves borrowing money from providers that are not traditional banks or financial institutions. Private lenders can include private loan companies with their own funding lines, financial planning investment funds, high net worth individuals or a combination of these. Private lending can include first mortgages, second mortgages and caveat loans. Lenders will assess loan applications based on the business loan to value ratio against the security that’s being offered and an applicant’s exit plan for the loan. The advantage of this

Blog, Cash Flow Lending, Equipment Finance, Secured and Unsecured Business Loans

Which Lending Option Is Best for Your Business

27 March 2023 / Blog, Cash Flow Lending, Equipment Finance, Secured and Unsecured Business Loans

As a small business owner, when financing a new business one of the most important decisions you’ll make is choosing the right financing option for your business’s financial situation. Whether you need capital to grow your business or just to manage day to day cash flow, there are a variety of lending finance options available to Australian businesses. Need a business loan now? Get a quote Cash Flow Loans Cash flow is the lifeblood of any business, and when cash is tight, a business cash flow loan can be a solution that provides relief and reassurance you can continue to carry out operations without running out of money. Business cash flow loans are designed to provide businesses with the capital they need to cover expenses, often without having to put up property or other assets as security. Unsecured loans, unsecured overdrafts, and invoice finance are all examples of cash flow lending finance options that generally don’t require business owners to put their property on the line. If you need a cash flow loan, determining the right solution for you will be influenced by factors like your industry, loan size and your asset position. Using Property Security Whilst there are some unsecured loan providers who offer loans up to $1M, if you’re looking for a larger loan, you may need to provide property as collateral to secure the loan you’re after. If you’re seeking a first mortgage, a second mortgage or a caveat loan, the amount you can borrow will depend on the value of your property and the equity available. The benefits of using property as collateral are that interest rates are typically lower than unsecured loans and there are a range of lenders offering secured loans from traditional banks to private lenders. Long-Term Strategy vs. Day to Day Cash Flow When you’re considering financing options for your business based on your current financial situation, it’s important to consider whether you need capital to support a long-term strategy or to manage the cash flow lending needs of day to day operations. If you’re looking to invest in long-term growth, a commercial loan or a term loan may be the right choice. These loans typically have longer repayment terms and lower interest rates than short-term loans. If you’re looking for a loan to manage day-to-day expenses, a business line of credit or overdraft is likely to be a better solution. Overdrafts allow business owners to access funds up to a pre approved limit. As the credit is repaid funds can then be accessed again and redrawn up to the limit to support business needs. Unsecured overdrafts are also available with no doc applications for limits up to $500,000 and can normally be set up with funds available in as little as 24 – 48 hours. Invoice Finance, also known as Invoice Factoring or Debtor Finance, is another cash flow lending solution that doesn’t require property security. This line of credit allows business owners to get paid the day they write their invoices which brings revenue recognition forward to support your day to day operational expenses and your current work in progress. Asset Based Lending If you need to borrow money to purchase equipment, asset-based lending may be the right choice for your business. Equipment financing is a type of asset based lending that allows you to borrow money to purchase new equipment or upgrade existing equipment. Your equipment serves as collateral for the loan, so interest rates are typically lower than unsecured loans. The benefit of business equipment finance is you can repay the cost of the equipment over a longer loan term while your asset helps produce an income. This means lower repayments which preserves your cash and allows you to scale your business at a rate that might not otherwise be possible. You can also use asset finance to unlock the equity in equipment and machinery you already own. Known as a sale and leaseback, this form of business equipment finance is a cost effective alternative to unsecured loans. Understand your loan purpose and match to the best lender for your industry Choosing the right lending finance option when financing a new business can be a daunting task, but by considering your cash flow needs, security options, long-term goals, and equipment needs, you can make an informed decision. Once you’ve worked out your loan type you should look for a lender that has a track record of providing the funds you need to your industry type in the timeframe you need. If you would like to talk to a business loan expert at darkhorsefinancial.com.au to help make the best decision for your financial situation. For business cash flow loans you can contact us here.

Blog, Equipment Finance

Business Equipment Loans for Older Assets and Equipment

19 July 2021 / Blog, Equipment Finance

Using business finance to source older equipment is a great solution for many business owners. With imports impacted by slowdowns and dock issues, there’s a real shortage of vehicles and some equipment. This has put upward pressure on the value of assets and as a consequence, we’re seeing a number of business owners turn to the second-hand equipment market, and roll over their existing equipment and machinery rather than buy new. But if you’ve ever looked to other equipment finance options such as older assets and vehicles to keep your business operating you know that major banks have a preference for financing equipment that is new stock. So what to do to get an equipment finance loan for an older asset? How to get equipment finance on older equipment and machinery Knowing that older stock often has a useful lifespan that’s beyond what the major banks wish to finance doesn’t mean you’re at a dead end. There are a number of lenders who fill this space and are happy to provide equipment finance against older assets. This includes rolling over a balloon payment that’s coming up at the end of an existing finance term or raising capital against assets for longer terms and lower rates than those offered by unsecured loans. Can I cash out equity in existing equipment? A sale and leaseback is a solution we’ve helped business owners with to raise capital. The lender will take a valuation of your asset and offer cash against the value which you pay back over a 3 to 5 year term in the same way you would any other equipment finance. This will result in longer terms available and with much lower rates than unsecured loans offer while still avoiding using residential property as security. The benefit of this is a business equipment loan that is much kinder to cash flow. What kind of older assets can I utilise with my equipment finance? There are so many different lenders with different appetites these days that if you can see it you can finance it. Beyond cars and trucks, we’ve also financed yellow assets, specialist engineering equipment, industrial food manufacturing machines, packaging lines, lifting equipment and much, much more. What if I have an ATO debt or my financials aren’t up to date? It’s true that some lenders will want their customers to be up to date with the ATO but for others they’re happy if there is a payment plan in place. Some lenders will look at each business on a case-by-case basis meaning that even without a payment plan we can successfully finance equipment for a business if you have a debt with the ATO. The same is true if your financials aren’t up to date. Increasingly, lenders are making assessments by reviewing 6 or 12 months’ worth of bank data and won’t need your financials to make a decision. Final thoughts on equipment financing for older assets Older equipment and machinery can be a great asset to your business finances and there’s normally a finance solution to match your situation such as an equipment loan. The key takeaway is to be upfront about your circumstances with your finance expert to get the best equipment loans for your business. How we are providing equipment financing solutions for our clients Here’s a list of some of the solutions we’re doing for clients at the moment. Talk about your business equipment finance with an expert Get in touch today to talk through your business finance options and receive an equipment loan that is right for your business. Related Links How to use equipment and asset finance for business growth Fast Finance using Equipment Finance Choose the right business loan for your business

Blog, Equipment Finance

Small Business Equipment Finance For Older Vehicles and Equipment

17 April 2021 / Blog, Equipment Finance

I met with a lender this morning who explained a new policy change on chattel mortgages that will definitely be of interest to small business owners. This lender has no age restrictions on financing second-hand assets and an interest in non-primary assets such as catering equipment, food processing, IT and fit-outs. They’re committed to beating other lenders in the market on price and we know they financed a 1987 Kenworth truck to show they’re ok with older assets. If a business owner is looking for cash, this lender will also offer ‘cash out’ against vehicles and equipment that they own outright – eg if someone needs a new engine for a truck, they’ve financed the wholly-owned truck to the value of the engine replacement allowing the business owner to pay off the cost of the new engine over time. I’ve also successfully created a solution with a lender to finance the purchase of equipment from overseas before it arrives in the country (assets normally need to be in Australia so the lender can take security over them and won’t fund overseas purchases in normal circumstances). This is a real niche finance offering to the small business market that can really benefit those business owners looking for value in second-hand assets.

Equipment Finance

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