Running a business comes with its fair share of challenges, and scaling up is one of the most significant hurdles to overcome. You might be in construction, manufacturing, logistics, or another industry that relies on equipment; regardless, having access to the right machinery on the right day can mean the difference between snagging that client and growing, or staying stagnant. That’s where equipment finance comes in.
For all business owners seeking a smarter way to invest in their business, there are options. Discover how equipment finance can streamline your day-to-day operations without draining your cash flow.
What is ‘Equipment Finance’?
In the simplest terms, equipment finance allows you to purchase or lease the machinery, vehicles, or tools your business needs by spreading the cost over time, rather than requiring a single upfront payment. Instead of paying for expensive equipment outright, you can create a runway for your business to grow and pay off the asset’s purchase with that growth.
Almost always, you’ll be working with regular repayments while immediately gaining access to the piece of equipment you need. This is why equipment finance is well-loved by businesses that need high-value equipment to do their work, but don’t want to put a bottleneck on their working capital.
You’re not restricted by industry here, although the most common borrowers in this category are in the construction or manufacturing industries. Anything that relies on a specific piece of equipment – from IT to medical provisions – can access this kind of finance.
How the Right Finance Boosts Your Business
It keeps your cash flow alive.
Whether you’re new to business or come to it with a lot of experience, you know one thing well: cash flow is paramount. Tying up large sums of money in new machinery or vehicles can leave you cash-strapped and inflexible, especially when you take other critical expenses into account (think payroll, marketing, inventory).
Equipment finance solves this problem by allowing you to maintain your cash reserves while still upgrading when needed.
It lets you stay competitive.
Industries evolve fast, and in many cases, succeeding is a case of keeping up. Using outdated equipment can put you at a disadvantage compared to the competition, so equipment finance helps you stay ahead. You can use your cash injection to buy cutting-edge tools without the financial burden of an immediate full-price purchase.
You might also find the lease structure helpful if you’re in an industry where essential equipment becomes redundant relatively quickly (i.e. construction, healthcare, IT).
It’s flexible enough to tailor to your business.
Your business doesn’t run the same way your neighbour’s business runs, so why should your equipment finance policies look the same? You might prefer a hire purchase agreement, an operating lease, or a standard repayment plan; all of these are viable.
The key is to choose a structure that aligns with your situation. This means you’ll find it easier to keep up with repayments and won’t feel the strain of the purchase.
It lets you scale faster.
When you have the tools you need, you can take on more work, improve productivity, and grow faster. Equipment finance lets you hit the gas on your plans for your business quickly, without waiting years to save up for major purchases.
If any of these benefits sound like something you need to incorporate into your business right now, then equipment finance might be for you. Let’s unpack how it works.
How Equipment Finance Works
Luckily, the lending application and approval process are straightforward when you go through the right company. With us, it’s a quick five-step process you can follow at any time in your business lifecycle:
- Understand what you need. You’ll already know the kind of equipment that’ll help your business grow, but be as specific as possible. The closer you get to the real price, the faster and more accurate your application will be.
- Choose a provider. It’s essential to work with a reputable lender (and we’ll throw our hat into the ring here) that understands your industry and can tailor a package specifically for you.
- Apply for finance. This is the paperwork step, so you’ll need the right documentation (business financials, forecasts, equipment details) to support your application.
- Get your equipment. Once approved, the finance company pays the equipment supplier directly, and you take delivery of your equipment.
- Start repaying. Over time, you’ll pay back the full amount while the equipment helps you generate the revenue to pay for itself.
Throughout the process, be sure to ask any questions that arise and confirm the repayment schedule before proceeding. This way, you know exactly what you’re signing up for, and there’s no stress down the line from unexpected repayment timelines. It’s all laid out in your policy, so if you are ever unsure of what’s required, ask your provider to walk you through the fine print.
Of course, this is contingent on you working with a provider you trust.
Is equipment finance right for your business? Find out with GVK Finance.
We understand the importance of having the necessary equipment for Kiwi businesses like yours, ensuring you can continue to maintain and grow. Our plant and equipment finance services are designed to help small and medium-sized businesses grow without financial strain.
If you’re after a quick, tailored solution that won’t leave you feeling like you’ve signed away your financial security, talk to the team at GVK Finance. We’ll help you make the right call.