Forklift Equipment Finance

Forklift Equipment Finance Information

When investing in major equipment such as forklifts, businesses need to secure cost-effective finance to ensure they realise their projected ROI on the asset. With new forklifts ranging up to the $45,000 mark and second-hand equipment averaging around $5,000, the finance package is a critical component of the purchase decision-making process.

Securing Cost-Effective Equipment Finance

Cost-effective finance is a loan deal that has been tailored to suit your business. Without taking into account your individual requirements in structuring the loan, it may be challenging to realise the cost-benefit outcomes that you need to achieve your financial objectives.

The sources for equipment finance are primarily banks, finance companies and finance brokers.

Approaching your bank may be the natural thing to do when you require equipment finance. But many banks have stringent guidelines and may not be in a position to meet your requirements. A similar scenario may apply when you approach a finance company.

Across business in all industries, astute operators recognise that a professional equipment finance broker is the best way to go for their finance solutions. When selecting a broker, ensure your broker is independent, accredited with many banks and lenders so they have a wide choice to source your finance and especially, have expertise in equipment financing. Brokers can arrange the full range of commercial finance products and structure the deal to suit your requirements.

Equipment Finance Products

The main types of equipment finance are:

  • Equipment Chattel Mortgage
  • Commercial Hire Purchase (CHP) for Equipment
  • Equipment Leasing

Deciding which is best suited to your operation requires consideration of the benefits and advantages of each product in relation to your business.

Key Differences

You should always refer to your accountant as to which commercial finance facility is best suited to your business as there are a number of differences across the portfolio:-

  • Accounting methods: choice will depend on whether you implement a cash or accruals accounting method.
  • GST: not all elements of every loan type are subject to GST.
  • Tax deductibility: not every element of every loan type is tax deductible.
  • Balance sheet: leasing is off-balance sheet options, Chattel Mortgage and CHP are on balance sheet finance.

Key Similarities

Despite the differences, equipment finance types usually share the same key features, which include:-

  • Fixed interest rate
  • Fixed monthly payments
  • Fixed loan term
  • Balloon, residual or buyback optional

Your broker will structure your deal with the elements that suit your business and as far as possible, ensure repayments are suited to your cash flow.

We know extremely experienced people with expertise in equipment finance who will work closely with you to tailor a finance deal to your specifications. If you would like the contact, please get in touch with us.