When applying for equipment finance, securing approval requires more than just submitting an application. Whether you're buying new equipment, upgrading existing equipment, or expanding your fleet of work vehicles, implementing strategic approval enhancement techniques can significantly improve your chances of obtaining the finance you need.
Strengthen Your Financial Position Before Applying
Lenders evaluate your business's financial health when determining equipment finance approval. Present a comprehensive financial picture by:
• Maintaining accurate and up-to-date financial statements
• Demonstrating consistent cash flow over the past 12-24 months
• Reducing outstanding debts where possible
• Ensuring your business tax returns are current
A strong financial foundation shows lenders that your business can manage cashflow effectively and handle fixed monthly repayments associated with equipment finance options.
Choose the Right Finance Structure for Your Business Needs
Different loan options suit different circumstances. Understanding which structure aligns with your business needs enhances approval prospects:
Chattel Mortgage: Ideal for businesses claiming GST credits, where the equipment serves as collateral. This option works well for vehicles, factory machinery, and commercial equipment finance.
Hire Purchase: Suitable when you want to own the equipment at the end of the life of the lease. This structure often appeals to lenders as it provides clear asset security.
Operating Lease: Appropriate for equipment that requires regular upgrades, such as office equipment or specialised machinery.
Selecting the appropriate finance structure demonstrates to lenders that you understand your business requirements and the commitment involved.
Provide Comprehensive Equipment Documentation
Lenders need detailed information about the equipment being financed. Strengthen your application by including:
• Detailed quotes from reputable suppliers
• Equipment specifications and model details
• Evidence of the equipment's relevance to your business operations
• Depreciation schedules where applicable
Whether financing a truck, trailer, excavators, tractor, graders, cranes, or dozers, thorough documentation supports your application's credibility.
Maintain Strong Supplier Relationships
Established relationships with equipment suppliers can enhance your approval chances. Suppliers who work regularly with finance providers often:
• Provide preferred pricing arrangements
• Offer streamlined application process coordination
• Supply detailed equipment information that lenders require
• Facilitate smoother transaction completion
Building these relationships proves particularly valuable when financing large purchases or specialised machinery.
Present a Clear Business Case
Demonstrate how the equipment will benefit your business operations and revenue generation. Include:
• Projected return on investment calculations
• How the equipment addresses specific operational needs
• Evidence of contracts or work that requires the equipment
• Operational efficiency improvements the equipment will deliver
A compelling business case shows lenders that the equipment purchase is strategic rather than speculative.
Consider Multiple Lenders and Compare Options
Accessing equipment finance options from banks and lenders across Australia provides several advantages:
• Different lenders have varying risk appetites
• Interest rate offerings can differ significantly
• Loan amount limits vary between providers
• Some lenders specialise in specific equipment types
Working with a finance broker provides access to multiple lending sources, increasing your chances of finding suitable terms for your specific requirements.
Prepare for the Application Process
A well-prepared application demonstrates professionalism and reduces processing delays:
- Gather all required documentation before starting
- Complete application forms thoroughly and accurately
- Respond promptly to any lender requests for additional information
- Ensure all supporting documents are current and legible
- Provide realistic loan amount requests based on genuine equipment costs
Thorough preparation shows lenders that you're serious about the transaction and capable of managing the finance relationship professionally.
Working with Experienced Finance Professionals
At Freo Finance, we understand the nuances of equipment finance applications and work with businesses throughout Osborne Park and beyond to secure appropriate funding solutions. Our experience with various lenders and finance options enables us to match your business needs with suitable lending partners.
Equipment finance approval doesn't have to be complicated when you approach it strategically. By implementing these enhancement strategies and working with knowledgeable finance professionals, you can improve your approval prospects and secure the equipment your business needs to grow.
Call one of our team or book an appointment at a time that works for you to discuss your equipment finance requirements.
