Equipment financing for small business

Equipment financing for small business

Many small business owners find equipment financing daunting. They are excited by the opportunity that these purchases provide, however they are nervous about the short-term impact it has on their finances and the long-term obligations. Bizally helps guide their small business clients through the process, providing practical support on budgeting and selecting the right financing solution for the type and stage of their businesses.

What’s classed as ‘Equipment financing?’

Equipment financing is a broad term. It can include everything from the vehicles you drive, to construction and manufacturing equipment, and even office equipment and fit-outs. Think of Equipment financing as a form of finance that is secured by a piece of equipment that is essential to running a business.

Purchasing or finance, what’s better?

You don’t have to finance equipment. You can purchase it outright, however, these purchases can have an impact on cash flow and have short term tax implications. For many small businesses financing equipment over a longer-term (e.g. 3 to 5 years) makes more sense. Financing allows small businesses to generate revenue now against equipment paid off over a longer-term and can provide greater tax benefits.

‘What if my business already has a loan?’

Financers see the equipment you are purchasing as collateral against the loan. Often their main concern is that you provide a business plan that demonstrates your ability to repay the finance over the full term.

Isn’t taking out finance over the long term a risk?

Any form of finance for small business is a risk. It's not easy to predict where your business will be in 3 to 5 years, so making a financing commitment over this time seems like a leap of faith… and it is. Small business is a leap of faith and the financing process is an opportunity to more than just add new equipment. It’s an opportunity to properly plan and budget for the future. It’s an opportunity to understand what challenges may lay ahead and build strategies to meet them.

For many small business owners, what starts as an opportunity to preserve capital and budget for long term cash flow, can turn into an opportunity to build a road map to future growth and success.

How Bizally can prepare you for Equipment financing

Successfully financing equipment and having access to the best interest rates depends on preparation. Bizally can help you with creating the types of budgets and report that are fundamental to the equipment financing process. They can also help with financing equipment that may be seen as unusual to a lender.

If needed, Bizally can even assist you in obtaining competitive finance quotes from a panel of major lenders and help you navigate the details (e.g. balloon payments).

Most importantly of all, Bizally can help you with your business planning and projections, cashflow planning and give you peace of mind so that you are as prepared as you can be to finance equipment and have the ability to make repayments over the long term.