‘Stuck in the Muck’ with your Finance? Read on…

When it comes to arranging equipment finance, Heavy Equipment Finance Australia Pty Ltd (HEFA) offers its clients seven key strategies to success.

HEFA is pleased to share them with readers of CMPA News:

1. Choose the right product
2. Choose the appropriate term
3. Don’t just ‘Go to the bank’
4. Consider factors other than just the interest rate
5. Obtain another finance quotation
6. You don’t need extra security
7. Arrange you finance through someone who understands your industry

Following are detailed explanations.

1. Choose the right product Finance Lease? Chattel Mortgage? Commercial Hire Purchase? Operating Lease? The most appropriate product for your business depends on your tax strategy, the type of equipment you are considering purchasing, as well as your repayment structures. We recommend to our clients that we work together with their accountants to ensure that the finance product and structure meets their objectives.
2. Choose an appropriate term There is no point arranging finance over a period of five years when your intentions are to upgrade your equipment every three years. Try to match the length of the term with the length of time you wish to keep the goods. This way you will avoid unnecessary early termination costs and charges.
3. Don’t just ‘Go to the bank’ Your bank, or any bank for that matter, can only offer their own products. Also, with over 15 lending institutions and financiers available in the marketplace, we consider it prudent to spread your company’s exposure (and therefore risk) outside just one lender.
4. Consider factors other than just the ‘interest rate’ We consider it our role to secure the most appropriate financier to meet our clients’ requirements. Whilst a good interest rate is obviously an important factor in the equation, we analyse the lender’s establishment costs and approval conditions, and aim to minimise the cost to our clients in the event that they pay the finance out early.
5. Obtain another finance quotation It costs nothing to request a second finance quote. A fresh opinion and free discussion on your equipment financing methods may prove to be a welcome surprise!
6. You don’t need extra security In order to approve finance, some lenders try to take extra security over clients’ other assets. Don’t surrender to it! Generally speaking, there is no need for this, as the equipment you are purchasing is sufficient security.
7. Arrange your finance through someone who understands your
   industry Arranging your equipment finance through somebody who does not understand your business can be disastrous. This only serves to confuse the finance company about your business as well as the equipment you are purchasing. The end result is that you receive an approval full of conditions that you do not want, or worse still, have the finance declined. That is why we say ‘when it comes to equipment finance, don’t get stuck in the muck’

HEFA has been a loyal, active member of the CMPA for six years, understands the nature of your business and equipment, and can justify its uses and benefits to a financier. As a leader in the heavy equipment finance industry and proven CMPA supporter, HEFA is a choice industry partner.

For further information, advice, or an obligation-free quote on your next equipment finance requirement, contact Mark Whitla on 1300 308 583 or visit www.hefa.com.au

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