Important Factors For Machine Financing

Setting up a new business or growing your current business is always challenging. It required a lot of research, market insight and courage to jump into new ventures. But the biggest obstacle that can slow down your idea is the availability of finance. In a new business or running business taking extra cash is a tricky decision to be made. As in the case of new business, one needs to have extra cash-in-hand to cater to upcoming challenges and ingrown business, pulling out cash from the current cash stream, will affect your present business. So any Capex investment is recommended to be financed from external parties, primarily when you have to buy new machinery or equipment.

The advantage of selecting machinery finance is that it is less tedious from getting a loan from the bank. As in the case of bank loan, down payment will be needed and the loan approval process is lengthy. Instead, if you apply for a machine lease, the approval process is quick, and you can get lease up to 100% value of machinery. 

 But there are few things which need not before getting into machine leasing option:

 Business Case

The most important tool for equipment finance broker Brisbane is the Business Case. It’s not important for securing a loan but this is also needed for as own homework. Because in business all the aspects will be covered. Extensive research will be done that why new equipment is need. Financial feasibility will also be made and return on investment will also be calculated. The well-prepared business case help lender to understand your plan and logical numbers can be very convincing to lender.

 Type of Lender:

Commonly there are two types of lenders;

 Banks

The approval process of the bank is monotonous. They have a strict approval policy, so they spend time on verification of documents. Banks check minute details of the project and every document submitted along with the application. The bank’s approval process can take up to 2-3 months with considerable chances of rejection in the end, on any account.

 Non-Banking Financial Corporation

NBFC is the best choice, especially for new companies. Their business models are designed to support SME’s but they can also invest in bigger businesses. They have comparatively lenient terms and conditions. The loan approval process also takes less time than banks. The one good thing about NBFC that they can invest in new and riskier ventures. 

 Type of Loans

There are two options mostly in practice for skilled truck finance broker in Sydney. One, get a lump sum amount as per the cost of machinery and pay the interest on the full amount. The other is to get a revolving line of credit, in this, the interest will be paid on the amount used not on all amounts. The revolving line-of-credit reduces the interest payment and provides flexibility in terms of finance utilization. Any of the two options can be chosen based on finance requirement