Equipment Finance FAQ's

Find answers to your frequently asked questions

How do I qualify for business Equipment Finance?

Equipment Finance eligibility differs from lender to lender, which is why when making the decision to finance the purchase of an asset, it's important to choose the right lender for your circumstances first and foremost. A good Equipment Finance Broker with access to a wide variety of lender options will take care of this process on your behalf.

To be eligible for commercial equipment finance you'll need to satisfy a few basic criteria:

✔  Have an active ABN (preferably GST-registered though not entirely essential).
✔  Be purchasing equipment with a serial number or other unique identifier which will be used for at least 50% business purposes .
✔  Prove your identity, as well as the identity of any co-applicants, guarantors, directors, or company shareholders with more than 25% interest in the business.
✔  Show proof of residential address. You do not need to own property however depending on the lender,  non-property owners may be required to pay a deposit or provide collateral security.

What type of information will I need to provide?

Equipment Finance loans are classified according to three main groups being No Doc, Low Doc and Full Doc applications depending on factors such the loan amount, the type and age of equipment being purchased, as well as the length of time your business has been running for. The minimum information required for all three types of application are proof of identification and residential address, a completed lender application form (including a signed Privacy Form), and full details of the asset/s being purchased,

As the names suggest, 'No' and 'Low Doc' applications require little to no financial information, while Full Doc applications require accountant-prepared business financials (Profit & Loss Statements and Balance Sheet) for the previous financial year as well as management accounts for the current year to date. Other information that may be required by the lender includes:

✔  Business and/or personal income tax returns
✔  BAS Statements
✔  Bank account statements
✔  Aged debtors and creditors
✔  ATO portal statements
✔  Existing commitment schedules
✔  Evidence of your work source eg. contracts or work reference letter
✔  Proof of ownership from the seller plus a third-party asset valuation or inspection (for private sales only) 

What will my interest rate be?

Interest rates are determined by the strength of the application and other variable factors, which is why low advertised rates may be deceiving as these may not always apply to your personal circumstances. Stronger applicants with a low risk profile attract lower interest rates, while the opposite applies to higher risk applicants. Application strength is determined by factors such as:

✔  The length of time the business has been in operation
✔  Profitability of the business
✔  Credit-worthiness of the applicant/s and the business (ie. credit scores)
✔  The type of asset being purchased
✔  The age of the asset being purchased 

How long does the application process take?

Conditional approval usually takes around 48 hours from receipt of a completed application (including all supporting information), while generation of loan documents for signature and return may take up to two days. Allow an extra day for settlement, and all going to plan, you could be collecting your new asset in around 5 business days from the date of lodging your application. 

How do I increase my chances of being approved?

✔  Use a reputable Equipment Finance Broker with access to a wide variety of lenders and loan options. Commercial equipment finance is a specialised field and is unlike consumer lending - make sure your broker specialises in this area in order to give yourself the best chance of an approval 
✔  Avoid shopping around for the best deal as this may have a negative effect on your credit score. A good broker will ensure you find the right loan to suit your circumstances
✔  Provide as much supporting information as possible upfront and as quickly as possible in order to avoid lengthy processing delays
✔  Diversify your lending. Most lenders will apply limits to the amount of funding they will approve for any one customer. By spreading your loan portfolio across several lenders, the chances of max'ing out your limits are significantly reduced

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