SJ Financial

How to finance plant and equipment to help your business grow

Written by Sandra on Sep 20, 2019

As your business grows, you’ll probably want to invest in plant and equipment that will help propel your business forward, improve your processes and boost your bottom line. With budgeting in place and a cashflow to consider, sometimes the best option to fund your growth is a finance loan.

Financing allows you to procure equipment at a fixed rate, for a fixed period, without having to purchase the equipment you need from cash or working capital.

With these financing options you can avoid many of the uncertainties associated with equipment ownership. Instead of making large purchases, plant and equipment finance spreads your investment out over a defined period and makes it easier for your accounting and to measure return on investment.

As a result, you can focus your energy on the equipment your business requires and the assets needed to continue its growth.

Why would I get financing instead of paying cash?

Many businesses don’t have the cashflow available to invest in large equipment and machinery that will improve their business processes and performance as it grows. For those who can, investing cash in plant and equipment can leave you with less cash at hand to fund operations and to explore new opportunities for the business.

Financing equipment allows you to access a loan with repayment terms that suit your cash flow and can also help with deductions at tax time.

Leasing or buying plant and equipment for your business – which is best?

Financing the full cost of your equipment allows you to pay off your investment in a manageable way. In most cases, the interest you pay on your finance and the depreciation of the equipment is tax deductible. Financing your equipment or plant purchase also doesn’t tie up your funds, so you can use your available cash to generate more income.

With a wide range of options available, an equipment or business loan can be tailored to your needs, making financing your growth easier.

Alternatively, a leasing agreement gives you access to equipment with no capital outlay. Your financer will own the equipment and give you access for an agreed period at an agreed cost. Payments are generally lower, however you will need to outlay cash at the end of the leasing term if you wish to secure the equipment as your own.

How to find the right plant and equipment finance option for me.

The last thing you want for your business is to drain your finances on a loan for your plant or equipment that doesn’t serve you best. With so much choice available, it can be overwhelming sourcing and negotiating the right option for your business.

Our team of experienced finance brokers are at hand to do all the legwork and take care of the fine details to ensure you get the right finance for your new equipment or plant investment. We can provide finance for trucks, bobcats, manufacturing equipment, yellow goods, medical equipment, IT equipment, agricultural equipment and more.

We will take you through the financing options available to you, including chattel mortgage, commercial hire purchase, lease, and make the process simple to help your business grow.

For help investing in the equipment your business needs, get in touch with our team today by clicking here or ringing us on (02) 4965 3100.

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