Financing Equipment

Financing equipment can seem like a complex undertaking as there are numerous approaches that can be adopted.  The different approaches adopted for equipment funding have different benefits and drawbacks that need to be considered.

Selecting which approach to use for equipment funding will firstly need to consider the type of asset that is being acquired as the general criteria adopted by the finance providers is that the asset must be durable, identifiable, and moveable.

The equipment loan can take three main forms; hire purchase, lease purchase or an operating lease. There are also a number of other terms relating to refinancing existing equipment loans, such as sale and leaseback.

The decision about which direction to go for the equipment funding also needs to consider the seasonality of the business and the cashflow demands of your business. It would be sensible to align the payment schedule to the revenue earning or cost saving value of the asset to the business.

Finally, when financing equipment the tax treatment of the asset financing method is also important as it can make a measurable impact on the cashflows of the business.

Talk to our brokers and determine the best solution for your business.
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