Equipment
Finance

Powering Business Growth with Equipment Finance

Having access to the right equipment and machinery can make all the difference between stagnation and growth. Equipment Finance offers a strategic solution for businesses looking to acquire essential assets without compromising their cash flow or capital reserves.

Understanding Equipment Finance

Equipment Finance is a specialised funding option designed to help businesses purchase specific categories of equipment and machinery. This financial tool allows companies to obtain 100% of the asset’s value, eliminating the need for substantial upfront capital investment.

By financing equipment rather than purchasing it outright, businesses can preserve their working capital for other critical areas such as operations, marketing, or innovation.

How Equipment Finance Works

When a business opts for Equipment Finance, they’re essentially borrowing the funds needed to acquire the equipment. The equipment itself serves as collateral for the loan, which means the financier takes a charge or security over the asset. This security arrangement allows lenders to offer more favourable terms and often faster approval processes compared to unsecured loans.

In the event that a business defaults on payments, the financier has the right to repossess the equipment. This built-in security measure enables lenders to mitigate their risk, which often translates to better interest rates and terms for the borrower.

Key Benefits of Equipment Finance

Preserve Capital: By financing equipment, businesses can retain their cash reserves for other important investments or unexpected expenses.

100% Financing: Unlike many other loan types, Equipment Finance often covers the entire cost of the asset, including additional expenses like installation or training.

Tax Advantages: In many cases, the interest paid on Equipment Finance can be tax-deductible, potentially offering significant savings.

Stay Current with Technology: Financing makes it easier for businesses to upgrade equipment regularly, ensuring they always have access to the latest technology.

Flexible Terms: Equipment Finance offers a range of options with varying terms and balloon payments, allowing businesses to tailor the financing to their specific needs and cash flow patterns.

Quick Access to Equipment: The relatively fast approval process means businesses can acquire necessary equipment quickly, capitalizing on growth opportunities without delay.

Off-Balance Sheet Financing: Depending on the structure, Equipment Finance can sometimes be kept off the company’s balance sheet, potentially improving financial ratios.

Customisable Solutions

Equipment Finance is not a one-size-fits-all solution. Depending on the business’s needs and the type of equipment being financed, there are several options available:

Finance Lease: The financier purchases the equipment and leases it to the business for a fixed term.

Operating Lease: Similar to a finance lease, but typically for a shorter term and with the expectation that the equipment will have residual value at the end of the lease.

Chattel Mortgage: The business owns the equipment from the outset, but the financier holds a mortgage over it until the loan is repaid.

Hire Purchase: The business hires the equipment with the option to purchase it at the end of the term.

At Unlocked Finance, we understand that each business has unique equipment needs and financial circumstances. Our team of expert finance brokers works closely with clients to identify the most suitable Equipment Finance solution, ensuring you can acquire the tools you need to drive your business forward without compromising your financial stability.