Equipment finance is more versatile than just a way to purchase assets like machinery and spread the purchase cost over the useful lifetime of that equipment.
If you have equity in your equipment you can use equipment finance to raise capital with what’s called a sale and leaseback.
Using your equipment as security, a lender will give you a loan against that equipment and you’ll be able to payback the loan over a three, four or five your term.
The benefit of this is it providers you an additional way to raise capital if you don’t have property security and can be used for any purpose.
Another benefit is the repayments will be smaller than an unsecured loan because you’ve got the longer term available. Your interest rates, and therefore the cost of the finance will generally be lower because it’s a secured product.
This is a great way to raise capital to take advantage of an opportunity and can even be used across a number of assets to raise larger sums.
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The Commonwealth Treasury has approved the first participating lenders in Phase 2 of the Government’s SME Guarantee Scheme. Key information on Phase 2 of Government