A Closer Look at Equipment Financing Options in NZ
If you’re navigating the financial landscape as a business owner in New Zealand, then we don’t have to tell you it can feel a lot like walking a tightrope. It’s the ultimate balancing act, whether you’re launching a startup or expanding what you’re already doing, and securing new equipment often lies right at the heart of it all.
When it comes to expanding, equipment financing can be a game-changer. It allows businesses like yours to access vital machinery or tools without depleting their existing cash reserves and puts the control in your hands.
If you’re considering your options for equipment financing, you’re in the right place. This post delves into everything you need to make informed decisions to drive your business forward.
Why consider equipment financing in the first place?
Investing in equipment outright can strain cash flow, especially if you’re running a small to medium-sized business. This kind of financing offers another way to do things, enabling companies to acquire the things they need to grow while spreading the impact of that cost over months or even years.
Not only does this preserve working capital – which can be reinvested in other places that help the business to grow – but it also helps to walk that ever-important tightrope and preserve an emergency budget.
Financing Options
The important part of this equation is selecting equipment financing that suits your needs. Aside from providers, there are a variety of financing types to consider, so it’s worth knowing about those in detail.
Finance leases
In this case, you would agree to a lender purchasing a piece of equipment and leasing it to your business for a fixed amount of time. Once the term ends, you can either choose to buy the equipment outright, return it, or extend the lease. This is excellent for any business that wants to maintain as much flexibility as possible.
Hire purchase agreements
On the other hand, a hire purchase agreement allows you to pay a piece of equipment off in instalments while using it. Once the final payment is made, the equipment is officially yours, which is why this is a good choice for any business that wants to invest in the equipment long-term.
Operating leases
For short-term needs, operating leases are a popular option. Once the lease ends, you return the equipment to the entity that loaned it, which can be the best choice if you need to stay on top of any technology or machinery that upgrades often.
Equipment loans
Finally, equipment loans are typically the most straightforward in New Zealand and also the most common of the lot. Essentially, you’re borrowing funds to purchase equipment and paying back the funds based on an agreed-upon term.
The equipment itself serves as collateral, which makes this a great choice for any business that already has steady finances but doesn’t want to risk other collateral.
With any of these options, you can preserve cash flow and scale your business with the kind of flexibility you need to survive and thrive in the current market.
Choosing the right provider in NZ
In New Zealand, you’ll find a range of providers offering equipment financing. Major banks like ANZ, ASB, Westpac, and BNZ provide tailored solutions for businesses of all sizes, which can be a good choice if you’re seeking the security that comes with a large, well-established entity.
That said, specialist lenders such as UDC Finance and Prospa focus exclusively on asset financing, which means they might be able to provide unique terms to suit what your business needs.
A vital note: There are many options for asset or equipment financing in NZ, so the most important part of the equation is not necessarily finding any provider; it’s finding the right one. Your business is built uniquely, so when going on your search, it pays to speak to a professional asset finance adviser who can help narrow the field or even match you with the perfect policy in a way that doesn’t pile on the stress.
Whether or not you choose to pursue equipment financing will depend on what your goals are for your business and how much you can rely on incoming cash flow. That said, it’s an important way to scale your business without dropping a lot of upfront capital, and securing this kind of financing is an everyday reality for industries around New Zealand.
The key to securely walking the tightrope is to ensure you have the right strategy in place. With that, you’ll be well-equipped to take your business on your envisioned path.
Invest in your business with total peace of mind.
Finding the right plan for equipment financing doesn’t have to be difficult, intimidating, or stressful. With the experienced team at GVK Finance, you can enjoy a streamlined experience that considers all of your needs as a business owner.
Simplify the process and scale your business safely. It’s that simple! Contact our team for help securing the right equipment loan for you.