If you’re a new business looking for equipment loans then there are a few things you need to consider. Most new businesses will need new equipment. This could be office furniture, a store fit-out, tools, computers or even earthmoving equipment.
As a new business, you’ll also no doubt be looking to finance some or all of your new equipment. As a new ABN business, you may find however that some lenders consider you higher risk. This will make it more challenging to seek equipment finance.
Our brokers are familiar with this scenario and have plenty of experience accessing finance for new business clients. To assist, Head of Asset Finance, Shannon Nowlan, has put together Six Tips for things he’s found can help when it comes to applying for equipment finance as a new business.
Six Tips to Optimise Your Borrowing Capacity
- Demonstrate Industry Experience: If you and your team have worked in the industry for a number of years, it can help to highlight this in your loan application. This will show you have the expertise required to manage your new business.
- Work Contract / Work Source Letter: Create a work contract or obtain a work source letter from a client. Put this in with your application to show the income that will be generated for your business from the equipment purchase.
- Business Plan: Have a business plan that outlines your financial projections. Detail how the equipment you’re purchasing will contribute to your business success can be of benefit.
- Build a Credit History for your Business: Obtaining a small business credit card for your business or a small line of credit and making timely repayments to build a positive credit history for your business can be helpful.
- Consider Using Rent-to-Own: Rather than taking out a loan to buy equipment, an alternative might be to rent the equipment you need in the first instance. We have access to rent-to-own equipment options. This will allow you to rent equipment for a fixed period and at the end of the term, you can choose to purchase the equipment or hand it back.
- Obtain a Consumer Loan: If all else fails, you may consider applying for a loan as an individual rather than a business. Once your business has been up and running for a while, you may then be eligible for a business loan.
In Summary
Remember, a lender will assess your business’s financial stability. They also assess creditworthiness and the equipment’s value. They may also consider the potential resale value. We can help find the right lender that understands new businesses and that has the best option for you. We’ll also help you put together a loan application that gives you the best chance of seeking equipment finance to get your new business up and running.
Contact our asset team for help and guidance with getting equipment finance for your new business.