Equipment finance is a beneficial tool that enables businesses to acquire necessary machinery, technology or vehicles without impacting cash flow. It's an agreement between a lender and a business, where the lender purchases the equipment and leases it back to the business for an agreed period, eventually leading to ownership.
Here's what equipment finance typically looks like:
- Borrow from $5,000 - $5,000,000
- Loan terms from 1 - 7 years
- Weekly, fortnightly or monthly repayments
- Fixed interest rates from 7.44%
- Interest rate tailored to your situation
How much can I borrow for equipment finance?
When it comes to equipment finance in Australia, the amount you can borrow will depend on various factors, including the value of the equipment you intend to purchase, your business's financial health, and the specific lender's policies. Equipment finance allows businesses to acquire necessary machinery, vehicles, or other equipment without tying up a significant amount of capital upfront. The loan amount for equipment finance can vary widely, ranging from a few thousand dollars to several million dollars. Financial institutions in Australia typically offer equipment finance loans starting from around $5,000, but the upper limit can vary depending on the value of the equipment and your business's needs.
Lenders consider the value and useful life of the equipment when determining the loan amount. Typically, lenders will offer a loan amount based on a percentage of the equipment's purchase price or appraised value. The loan-to-value ratio (LVR) commonly ranges from 80% to 100%, meaning you may be eligible to borrow up to the full value of the equipment. It's important to note that lenders will assess your business's financial stability, creditworthiness, and ability to repay the loan when determining the loan amount. Providing detailed information about the equipment you plan to purchase, including quotes or invoices, can help strengthen your loan application and potentially increase your borrowing capacity.
