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Equipment Finance - 5 Key Questions You Need to Ask

Equipment Finance Melbourne
Equipment Finance – 5 Key Questions You Need to Ask

Starting a business of your own can have its own shortcomings, the greatest of all being lack of finances. Not having access to the right equipment for tasks that you undertake as a business can put you in a difficult position. With avenues that help with equipment finance in Melbourne, financing your business requirements becomes easier.

By asking these questions, you can make a prudent decision in choosing the right finance company to finance your company equipment:

Do I get the equipment on lease or purchase it using a loan?

This is, perhaps, the most vital question you need to ask yourself. The process to obtain the equipment through either a lease or loan will both be different. Getting an equipment loan in Melbourne would mean having someone loan the amount you need to make a purchase with you paying the loan back over time along with the interest.

On the other hand, a lease involves a lender purchasing the equipment with you renting the equipment from the lender for the duration required.

What will the total expense be in both cases?

Both a lease and a loan can be easily managed without leaving a big dent in your savings. A great boon to opting for a lease is that you have no down payments to make. You will solely have to pay the lease amount with the equipment as the collateral.

Choosing a loan to purchase the equipment will require a down payment as a deposit, which could amount to about 10% of the equipment cost. Here, too, the equipment will serve as collateral.

If I opt for a lease, what happens when the lease ends?

If you’re worried about the possibilities of what would happen when the lease ends, you have a number of options to choose from.

Option 1: You can return the equipment once the lease ends.

Option 2: You can renew the lease if you still have need of the equipment.

Option 3: You can purchase the equipment at either a nominal fixed price or a fair market value.

Will I be responsible for the maintenance and repairs of the equipment?

If you have purchased the equipment using an equipment loan in Melbourne, you or your company is solely responsible for the maintenance of the equipment. However, with leasing, things might be different.

You can find out your liability toward the equipment while signing the contract with your lender. The liability also includes equipment insurance, tax, and other obligations.

How do I decide between a lease and a loan?

Choosing between a lease and a loan can be difficult, considering the benefits that both options offer. The best way to think through these choices is to consult a good equipment finance broker in Melbourne who could take you through your options by figuring out your requirements and your financial circumstances.

At Car Finance 4 You, we help you finance your business needs through options suited to your requirements, helping you stay on par with your competitors.