With over 10,000 individual business niches in the world, and more than 20,000 new businesses registering in Australia each year alone – it should come as no surprise to learn that many of these companies approach their industry with as much caution as possible. With over-crowdedness playing a major role on company profits, it can be very important to maximise productivity, whilst minimising expenses. Anything less than this can result in a business struggling to make a name for itself.
They say that you have to spend money to make money and this has never been truer than when running a business, regardless of whether it operates online, or via physical premises.
In order to get the most out of their services, many companies are considering Equipment financing a to z as a viable solution to ensure that they have access to the resources that they need to be able to operate. But which types of equipment can be purchased under these agreements and are there any restrictions?
Equipment Financing Categories
Most lenders are fairly flexible when it comes to allowing their borrowers to make purchases, but there are certain things that they will not permit. For example, if a business wanted to borrow money to pay off a debt, then a finance agreement may not be the best option and a lender will reject an application.
Likewise if the business wanted to borrow money to lend it on to someone else, the chances are that a lender won’t be willing to risk a third party agreement, so the application will likely face a rejection because they found out that they know how to organise equipment financing. There are other restrictions, but there will depend on the lending agency and their own individual policies.
What can be purchased?
If you consider that different industries will require a range of equipment, accessories and products in order to function – it should come as no surprise to learn that lenders often categorise their services to cater to these individual niches. For example, when a piece of agricultural machinery is required, then the lender will most likely extend a service that caters to these types of equipment.
The same can be said for the medical industry, with lending agents offering services that apply directly to the purchase of medical equipment and machinery. The construction industry will have the same terms applied, as will the technological and digital genres. The reason for this is that different products will possess varying values, so some may be considered more commercially valued than others.
That being said, there are some agencies that prefer to encompass their lending policies and follow a list of equipment financing categories into one all-dictating process that will apply to equipment of all types. These finance agencies will often extend similar interest rates and cash amounts for the majority of applications, but they will still want to know what is being purchased and when they can expect their money back.
From the smallest office in need of stationery to the largest factory that requires plant and machinery finance options to purchase the right types of equipment; financing can be a great way to buy whatever is needed and then pay back at a later date. There aren’t many categories of products that can’t be bought, but it’s always best to check with a lender beforehand, or get in touch with an expert for further advice and information.