Consider this checklist from Australia’s Commercial Capital Group before you sign a loan for equipment finance.

If you’re considering an upgrade of capital equipment, what are your best finance options? There are a number of factors that can impact the loan you qualify for or even the type of loan you can be offered.

Starting with:

  • The type of equipment — does it have a serial number?
  • Is it a fixture? (attached to the floor or wall).
  • Do you quote ‘soft costs’ such as electrical, demolition, plumbing and carpentry?
  • Are you registered for GST? If so, for how long?
  • Is your tax up to date?
  • Does your business have up-to-date financials?

There are only a few actual funding products (finance lease, chattel mortgage, operating finance lease (rental) and commercial hire purchase, but each lender can have different terms and conditions and requirements.

Consider these points:

  1. Are the loans you took out at the beginning of the business the best type of loan now you’re established?
  2. What is the lifecycle or usable life of the equipment? Does it match the term on offer?
  1. Do I want ownership now or in the future of this equipment? How does that work?
  2. Can I payout early and get a discount on unpaid interest or costs? Are there any penalties?
  3. What is the final payment (balloon/residual) if any on my proposed loan?
  4. You have been given the option to hand it back at the end of term, but you couldn’t afford the downtime to replace it. Is the loan the best option?
  5. Most suppliers need to be accredited — do they have a website and are they well established?
  6. Will the loan really suit my cashflow need?

For more information, visit the website or call 02 9167 7910.