Hold onto your cash and have your equipment too.

Growing your business can be a nerve-wracking experience at the best of times. If market conditions are uncertain, it can be even more difficult to commit to spending thousands on new equipment, marketing, staff and infrastructure - no matter how essential.

To compound the stress, it can be easy to fall into the trap of thinking that any type of capital is good capital. However, more often than not, there are consequences in selecting the wrong type of finance, at the wrong life stage of your business.

Even choosing the "wrong" lender will have implications for accessing further credit and inhibiting growth in the short term.

If, like many businesses, you do not have the cash to purchase your income-generating equipment outright but do have sufficient cash flow, equipment finance may be just what you're looking for. Even if you have the funds available, equipment finance offers a number of benefits for all sorts of businesses across a range of life stages - even at start-up.

Yes, lenders may lend you money to purchase assets even though your ABN may be just weeks old.

WHAT TYPE OF EQUIPMENT?

Business equipment of all sorts can be financed, from vehicles to computers and IT equipment right through to heavy machinery, heavy commercial vehicles and even medical and scientific equipment. Almost any type of equipment can be financed. Even retail and hospitality premises can be completely refitted with the support of right type of finance.

Different types of finance will apply to different types of equipment and different types of businesses - taking into account the age, the lifecycle of the equipment (the timeframe in which it will become obsolete), your business' structure and other requirements.

DOWN TO DETAIL

Once you've got a good idea of what you're after, consider the specifics of the equipment you need:

• Is it additional or replacement?
• Which brand/model do you want/need and why?
• Considered used or refurbished equipment?
• Is this equipment required every day, intermittently, or maybe seasonally?

At this stage, I recommend working with a consultant, involve them in your planning, as they will need to know exactly what you intend to purchase and whether there will be subsequent purchases you need to make.

SMART PLANNING

Equipment is normally financed at a fixed interest rate, with all payments during the term of the agreement known in advance.

In addition, you can normally choose to finance your assets in line with your business' growth and cycles - for example, you could structure your repayments to be lower while the business is building, or in the initial stage of a project.

Likewise, your payments can be structured around seasonal and other business-specific fluctuations.

FLEXIBILITY TO SUIT

When it comes to financing your equipment, there are options to suit your accounting, GST, ownership and payment requirements, both throughout the contract term and when it ends.

Knowing the length of time that the equipment is needed, your company's cash flow and projected growth and your tax situation will help your finance consultant structure the best equipment finance package for your business' needs.

HOLD YOUR CASH - AND HAVE YOUR EQUIPMENT TOO

Financing business equipment can be complex at the best of times. An experienced commercial broker like stratton will help you find the right structure, right lender for your business life stage, while making the process efficient and hassle-free.

Make sure your equipment earns its keep and you don't pay more than you have to. Call 1300 738 290 or enquire now to hold on to your cash and have your equipment too.