Plant & Equipment Finance is a Commercial Loan product that can be used for plant or equipment within the use of your business. You can structure the finance through one of the Business Finance structures at your discretion, such as Commercial Hire Purchase, Chattel Mortgage or Finance Lease.
Due to the nature of the asset being financed, the asset in most cases would be used in the course of generating income within your business, so the lender will require to determine the strength of the application through your Financial Statements and at times could also use a cash flow forecast projection of how the asset is going to generate additional net income to your business, such as income and expenses solely on the asset being used as security.
Commercial Business Loan
The asset itself would be used as security over the loan, which can make it a little easier than getting a Business Loan directly from the bank, although the lender will still treat this as a Commercial Business loan in regards to assessment and may require sufficient documentation from the borrower in regards to determining feasibility.
Outside of the borrower’s full financial statements, which include the balance sheet and Profit & Loss Statement, they may require additional documentation, such as contracts where the asset is being used, and cash flow forecast projections to show the net income the asset can generate the borrower. This just gives the lender a bit more comfort knowing where their repayments are coming from.
Each and every application would be assessed on a case by case basis and many businesses would still be showing enough profit on their financials alone to obtain approval, without the additional documentation.
Generally turnaround time on Equipment Finance can take longer than a car loan, due to the valuation of the asset being more difficult to determine and the more in depth assessment process in regards to analysing the strength of the borrowers and any guarantors.