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Asset and equipment finance can be one of the most flexible and cost-effective ways for your clients to get the significant asset they need, without tying up their business capital. It allows them to preserve their cash and credit lines for working capital or other strategic purposes, and the debt is often deductible.
Award-winning broker Danny Graves, finance specialist from FinanceEzi in Queensland has a strong track record in securing asset and equipment finance for clients. We spoke with him about how it’s helped his clients grow their businesses.
1. What do your clients typically use Asset and Equipment finance for?
Many business owners buy a car or a van for their business use, others use it for commercial machinery, prime movers, excavators, freight equipment, and even caravans. For example, I have a client who runs a jet ski accessory business. Using asset finance, he purchased a caravan for his business, enabling him to travel around the country to various lakeside jet ski locations and water sport events, and sell his products where customers gather.
2. How does it help your clients’ growth strategies?
Most of my clients understand that the growth of their business hinges on their ability to use debt as a tool, in a smart way. One of my clients, a transport company, was offered an additional contract by a large grain company, provided they could source an extra truck. Using debt was the most sensible way to purchase the $500k vehicle. I was able to arrange the finance for them in a timely and efficient manner, based on the contract and their experience in the haulage business. They got the finance and the truck on the road in around 2 weeks.
3. What types of businesses benefit from using Asset and Equipment finance?
Any business can benefit from having access to finance options, whether they’re relatively new or well-established. It’s essential that everything stacks up from the lender’s perspective – for example, a written contract with a potential guarantee of income, or a business that’s experienced in its field and has a track record.
4. When helping to secure finance, what does the conversation look like for the client?
My clients approach me when they need to use debt for their business, such as when they’ve had an offer of extra work or a new contract. Gathering all the information on the customer’s situation is critical to getting the best finance deal for what they need. Business owners are often guided by their accountants, who may advise them that the business needs to spend some money. An asset or equipment loan is a good way to go in these circumstances.
5. What are the key things to look for in an Asset and Equipment finance lender?
It’s about ensuring my client gets the best loan structure and finance outcome for their situation. Some lenders are very rigid in their credit criteria which is less preferable. Flexibility in a lender makes a massive difference. One of the best things about Banjo is how they will work with you to find a positive outcome and get the deal done for the client.
6. Are there any common misconceptions about this type of finance?
There’s generally a reasonable level of understanding. However, if a business has previously approached a major bank for asset finance, they’ve found it takes a very long time, and expect that other lenders will be the same. They’re pleasantly surprised at how much quicker the process is with a non-bank lender.
7. Finally, how do you think it helps businesses to get ahead?
Whether it’s a business that’s got new work lined up, and just needs the asset to fulfil the contract; or a company diversifying into a related field; or introducing a new product line or technology, the opportunity can be taken up and funded in a smart and timely way.
Speak with your Banjo Loans specialist about the best approach for your clients’ Asset Finance needs, and help them write their next chapter of business growth.
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