Businesses throughout Australia are purchasing new equipment and vehicles in historic numbers, according to National Australia Bank (NAB) data, as they take advantage of the best market conditions in years.
Following 2020, when businesses throughout the world were forced to ‘pivot’ their operations due to the pandemic, Australian businesses spent this year capitalising on equipment financing possibilities.
“With business confidence at an all-time high and businesses building on lessons learned from the pandemic, I’m not surprised that equipment sales are so high,” says Julie Rynski, NAB Executive Regional and Agribusiness.
The Commonwealth Bank of Australia (CBA) is also optimistic about the economy’s growth and how it has translated well into plant and equipment financing. With fresh finance data from the CBA indicating a 36% rise in business automobile borrowing compared to the same period last year, Australian firms are getting back into action.
According to NAB, the following are the top equipment acquisitions made by Australian businesses:
- Tractors are up 146% Year Over Year (YOY).
- Irrigation equipment has increased by 217% YOY.
- Construction and earthmoving equipment are up 133% YOY.
- Forklifts have increased by 216% YOY.
- Coffee machines are rising 155% YOY.
According to CBA’s latest automotive asset financing data, they have also recorded a dramatic rise of equipment financing in the last year, which is broken down as follows:
- Heavy trucks accounted for a 50% increase,
- Light commercials for a 187% increase,
- Utes and vans for an 85% increase, and
- New passenger and SUV cars accounted for a 36% increase.
Following the recent budget statement, the big banks expect this demand to continue until mid-2023, a significant benefit for Australian businesses to capitalise on.
According to Prospa Research, One in Every Four Small Companies Plan to Borrow in 2021
If you’d like assistance securing business financing to take advantage of these market highs for your business, please contact First Choice Mortgage Brokers. Our reputable mortgage brokers can help you with your financing plans to find the best-suited loans for your company’s current and future demands.
First Choice Mortgage Brokers consult small, medium, and large businesses one-on-one about business finances, holding our client’s best interests at the core of every decision. Since business loans can differ a lot between suppliers – in terms of amount, terms, interest rates, fees, and security – it is best to closely review all financial products with a mortgage broker before applying.
Need a Mortgage Broker for Equipment Finance?
Take the guesswork out of choosing your business loan with First Choice Mortgage Brokers! Our reliable mortgage brokers will compare dozens of business loans currently available on the Australian market to find the best loan for your unique situation.
While most people relate equipment financing with obvious business equipment like trucks, forklifts, refrigerators, trailers, conveyor belts and garbage compactors. Your mortgage broker can suggest tailored ways you can use equipment financing to order to best help your business. For example, equipment financing can also be used for less obvious equipment purchases such as solar panels, accounting programs, telephony systems and IT software.
The main requirement for utilising equipment financing is, the investment must aid in equipping your company with its needs to expand or better operate.
What Equipment Financing Does First Choice Mortgage Brokers Offer?
The First Choice Mortgage Broker experts can supply clients with various equipment financing loans, depending on personal preferences and financial history. The most common equipment finance loans offered in Australia includes commercial hire purchase, chattel mortgage and equipment finance lease.
Simply put, a commercial hire purchase (CHP) is financing obtained by a company to buy commodities and is accounted for on the balance sheet. In this type of agreement managed by a mortgage broker between a leaser and a financier, the financier owns a vehicle or equipment during the hiring period but is used by the leaser.
CHP agreements vary from a finance lease, as the goods automatically become the leaser’s once all terms of the agreement have been met – typically, this takes place when the final instalment is paid.
A chattel mortgage is a similar arrangement to a hire purchase but with additional specific GST benefits. In certain circumstances, the GST incentives can allow the entire GST proportion to be claimed in the first BAS period after purchase. A loan arrangement can be tailored similarly to a CHP or finance lease with the help of a mortgage broker.
An equipment loan lease is similar to a hire purchase agreement managed by a mortgage broker, except instead of accepting deposits with the intention of owning the equipment. The company negotiates with the guidance of a mortgage broker a new lease deal at the conclusion of the lease contract and then keeps leasing the original item or opts to lease a new item. This allows a company to have access to cutting-edge technology without having to expend money actively.
What are the Interest Rates on Equipment Loans?
Your First Choice Mortgage Broker can secure you a good interest rate on your equipment loans, but usually, they vary between 2% and 20%. Your mortgage broker can acquire better interest rates depending on your credit score. Although interest rates and repayment amounts differ according to a variety of reasons, some examples include:
- The financing solution you choose,
- The asset’s type and age,
- The agreement’s terms and conditions,
- Your credit scores,
- How long you have been in business for.
Ready to get Started with an Australian Mortgage Broker?
If you are looking to grow your business, need help with cash flow or are finally starting your new business First Choice Mortgage Brokers can help!
First Choice Mortgage Brokers have over 30 years of experience in the Finance and Banking Industry. We are well-positioned to assist you with all your financial requirements. Our mortgage brokers are available to visit you at your workplace, home, or location of convenience to discuss your current situation and how First Choice Mortgage Brokers can assist.
From business loans, home loans, investment properties, debt consolidation, personal risk insurance and everything in between, we offer all mortgage broker services for FREE! So, you can sit back and relax while we do the running around to find the perfect fit for you.
First Choice Mortgage Brokers offers services throughout all major capital cities, including Mortgage Brokers Sydney, Mortgage Brokers Melbourne, Mortgage Brokers Brisbane, Mortgage Brokers Adelaide, Mortgage Brokers Perth and throughout Australia.
Please call First Choice Mortgage Brokers on 1800 111 455 or email First Choice Mortgage Brokers at firstname.lastname@example.org to discuss your home loan opportunities and any assistance in accessing the home loan application process.