Asset finance is a financing option that enables businesses to acquire essential assets without making a significant upfront payment. It offers flexibility by spreading the cost over an agreed-upon period. Asset finance covers various assets, including vehicles, machinery, technology, and equipment. Businesses can leverage asset finance to acquire these assets quickly and efficiently, enhancing productivity and growth. With asset finance, businesses can preserve their cash flow and allocate resources to other critical areas of their operations. This financing option allows businesses to access the assets they need without depleting their capital reserves, supporting their long-term success.
Here's what asset finance typically looks like:
Asset finance can be used for acquiring a wide range of assets. This includes business vehicles, machinery, IT equipment, and even intangible assets like software. It's ideal for businesses aiming to stay competitive by regularly upgrading equipment, or those seeking to manage cash flow by spreading the cost of expensive assets.
Here are some common reasons people take out asset finance:
Asset finance is commonly used to acquire vehicles for business purposes, such as cars, vans, trucks, or specialised vehicles.
Asset finance can help businesses purchase essential machinery and equipment required for their operations, such as manufacturing equipment, agricultural machinery, or medical equipment.
Asset finance is often utilised to invest in technology and IT infrastructure, including computers, servers, software, and communication systems.
Businesses frequently use asset finance to acquire office furniture, including desks, chairs, cabinets, and other fixtures needed for their workspace.
Asset finance is commonly employed in the construction industry to obtain heavy equipment like excavators, loaders, cranes, and bulldozers.
Asset finance can be used to fund the acquisition or development of commercial properties, such as retail spaces, office buildings, or warehouses.
Asset finance enables manufacturers to acquire specialised tools, machinery, or production lines necessary for their manufacturing processes.
Asset finance is frequently utilised in the healthcare sector to acquire medical equipment, diagnostic devices, or specialised healthcare machinery.
Businesses in the restaurant and hospitality industry often use asset finance to acquire commercial kitchen equipment, refrigeration systems, or hotel furniture.
Asset finance can be utilised to invest in renewable energy systems, such as solar panels or wind turbines, to promote sustainable practices and reduce energy costs.
Calculate your repayment estimates and more.
When it comes to asset finance in Australia, the amount you can borrow will depend on several factors, including the type of asset you intend to finance, its value, and the lender's policies. Asset finance allows businesses to acquire essential assets without the need for a significant upfront investment, making it an attractive financing option. The borrowing limits for asset finance can vary widely, ranging from a few thousand dollars to several million dollars. For smaller assets like office equipment or technology, you may be able to secure financing up to $100,000 or more. Larger assets such as commercial real estate or specialised machinery may qualify for higher loan amounts, potentially reaching several million dollars.
The specific loan amount you can borrow will be determined by factors such as your business's financial stability, creditworthiness, and the assessed value of the asset being financed. Lenders typically consider the asset's resale value and its ability to generate income when determining the loan amount. It's important to note that asset finance is secured by the asset itself, meaning the lender has a claim on the asset if you default on the loan. This security allows lenders to offer more favourable borrowing terms and potentially higher loan amounts compared to unsecured financing options.
To estimate your monthly repayments and the total cost of the loan, input the loan amount, loan term and interest rate into the calculator below. This helps you plan your budget and choose the most suitable loan terms.
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Lenders consider several factors when assessing your eligibility, including your credit score, income, debt-to-income ratio, age, residency, and required documentation. While meeting the eligibility criteria doesn't guarantee loan approval, having a good credit score, stable income, and a positive financial profile significantly improve your chances.
You are eligible to apply for asset finance if you are:
Applying for asset finance is easy and only takes a few minutes. Get started by filling out some basic information into our application form. We’ll review your information, and someone will be in contact with you to discuss the best option for you from over 40+ Australian lenders.
If you’re eligible for asset finance, and you are happy with the initial quote, you will need to prepare documents such as:
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When searching for asset finance, it's essential to understand the different factors to find the best fit for your needs. From interest rates and fees to loan terms and early payout options, each factor can increase or descrease the total amount you will repay.
When it comes to obtaining an asset finance loan, one of the most important factors to consider is the interest rate. The interest rate directly impacts the overall cost of borrowing and your monthly repayment amount. It is crucial to compare rates from different lenders to ensure you secure a competitive rate that aligns with your financial goals and helps you save on interest expenses over the loan term. Keep in mind that your creditworthiness, the type of equipment being financed, and the lender's assessment of risk will all influence the interest rate you are offered.
In addition to the interest rate, it is essential to carefully evaluate the fees associated with asset finance loans. These fees can include application fees, origination fees, documentation fees, and ongoing administrative fees. By understanding the fee structure of different lenders, you can choose a loan with transparent and reasonable fees. It's important to note that while some lenders may have lower interest rates, they may offset it with higher fees. Therefore, a thorough assessment of both interest rates and fees is necessary to ensure you minimise costs and maximise the value of your asset finance loan.
When comparing asset finance loan options, it is not sufficient to consider the interest rate alone. To gain a comprehensive understanding of the true cost of the loan, it's essential to examine the comparison rate. The comparison rate takes into account both the interest rate and any additional fees associated with the loan. This rate allows you to make a more informed decision by considering the total cost of borrowing. By comparing comparison rates from different lenders, you can better assess the overall affordability of each loan option.
The loan term or repayment period is an important aspect to consider when obtaining asset finance. The loan term typically determines the duration of your repayments and can range from a few months to several years. A shorter loan term usually means higher monthly repayments but lower overall interest costs, as you'll be repaying the loan in a shorter timeframe. On the other hand, a longer loan term may result in lower monthly repayments but could mean higher interest expenses over the life of the loan. It is essential to evaluate your business's cash flow and equipment usage to determine the loan term that best suits your financial situation.
In some cases, asset finance loans may include the option for balloon payments. A balloon payment is a larger lump-sum payment due at the end of the loan term. While balloon payments can help reduce monthly repayment amounts, they require careful consideration. It's important to assess whether your cash flow and financial resources will allow for the balloon payment when it becomes due. Balloon payments can be a suitable option if you anticipate having significant funds available or if you plan to refinance the balloon payment at the end of the loan term. However, it is crucial to fully understand the implications of balloon payments and their impact on your overall financial strategy before committing to this structure.
Flexibility in loan repayment is a valuable feature to consider when seeking asset finance. Early payout options allow you to repay the loan before the agreed-upon term without incurring any penalties or additional charges. This flexibility can be advantageous if your business experiences a financial windfall, allowing you to reduce interest expenses and become debt-free sooner. Before finalising an equipment finance loan, it's essential to review the terms and conditions to ensure that early repayment is possible and to understand any potential limitations or conditions that may apply.
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