ultro finance | benefits of financing

Plant or machinery financing offers an excellent alternate source of capital and a flexible alternative to cash in the purchase of business-critical assets and equipment.

Given today's financial climate and the rapid pace of technological obsolescence, many companies employ some form of equipment financing.

Equipment financing allows companies to purchase equipment at a fixed rate, for a fixed period of time, without having to purchase the equipment from cash or working capital. Leasing permits you to avoid many of the concerns associated with equipment ownership and instead allows you to focus on using the equipment or assets to run and grow your business.

Companies choose to lease equipment rather than purchase equipment for many reasons, including:

Cash flow
The preservation of cash flow compared to conventional financing is the most attractive benefit of leasing. A “true” lease can offer low cost financing because the lessor takes advantage of tax benefits that are passed to the lessee in the form of reduced payments. If the lessee cannot currently use tax depreciation to offset taxable income due to current operating losses, loss carry-forwards or alternative minimum tax, depreciation benefits may be effectively lost forever if the lessee purchases rather than leases.

Convenience/Speed
An equipment lease/finance transaction in many cases can be executed and completed in less time than traditional financing alternatives.

Get 100% financing with no down payment
Unlike requirements of most traditional lenders, you may be able to arrange 100 percent financing of equipment with no down payment. This is key if cash flow is a concern to your business.

Maintain cash
Equipment financing is a source of funding that lets you hold onto your cash, or working capital, so it can be used for other areas of your business, such as expansion, improvements, marketing or R&D.

Manage risk
Equipment financing can help mitigate the uncertainty of investing in a capital asset your business needs until it achieves a desired return, increases efficiency, saves costs or meets other business objectives.

Hedge against inflation
Equipment financing may hedge inflation risk because instead of paying the total cost of equipment up front or with a large down payment in today's dollars, the stream of payments delays your outlay of funds. In addition, either a lease or loan can lock in the rates that exist on the date of the closing. In other words, the finance company absorbs the devaluation of your payments over time due to inflation and other financial risks.

Plan expenses for cash flow and business cycle fluctuations
Financing equipment helps maintain cash flow and greater certainty in budgeting by setting customized rent payments to match cash flow and even seasonal cash flows.

Keep up to date with new technology
Leasing, loans or other financing often enables you to acquire more and better equipment than you could have without financing. Certain leasing finance programs can also allow for technology upgrades and/or replacements within the term of the lease contract.

Address tax considerations
Tax-oriented leases should produce lower rents since the lessor retains title and depreciation. A tax-oriented lease is a transaction that includes the value of tax benefits. Conversely a conditional sale or loan enhances tax benefits of higher deductions to the lessee/borrower.

Leverage equipment expertise
The equipment financier can be a valued consultant, providing benefits that range from setting residual rates through lifecycle asset management solutions.

Avoid getting stuck with out-of-date equipment
When a lessor owns the equipment in a true lease, the lessor bears the risk of the equipment used by a business from becoming obsolete.

Outsource asset management
Many financing companies provide asset management services that can track the status of equipment, know when to upgrade or update it, and provide services relating to installation, use, maintenance, de-installation and disposal of the equipment.

Obtain the convenience of product and service bundling
Certain financial products allow customers to finance the entire cost of equipment, including installation, up-front maintenance, training and software charges, thereby packaging systems and ancillary products and services into a single, easy-to-manage solution.

Get no-hassle equipment disposal
Equipment management by a third party, such as an equipment financing company, should enhance the ability of a business to focus on its core operations. In the case of computers and other technology devices, these companies may also agree to dispose of equipment. This service can prevent the lessee or borrower from incurring legal penalties for improperly disposing of such assets because disposal is often regulated by federal, state and local governments.

Access to Private Funders
Most clients in the market place searching for truck or heavy equipment funding, have the ability to deal with the big four banks. A Finance Broker on the other hand, have relationships with Private Funders that specifically lend money for trucks and heavy equipment.

There are countless occasions where the big four banks will not take on certain transactions, whereas these specialist private funders will have a look at these deals in an open-minded approach.

Deals that private funders would give consideration to are as follows:
Low doc loans
Credit impaired customers
New start businesses
Specialised goods
Complex transactions

Clients that use the services of an Equipment Finance Broker have far higher access to financing facilities than if they sourced truck or heavy equipment finance of their own.

Develop Long Term Connections
Truck Finance Specialists All too often have phone calls from new customers indicating that the Bank Manager they used to deal with is no longer around and has moved on to a different area of the bank.

Customers also like dealing with the same person over a long period of time as they feel supported and comfortable knowing they are dealing with the right person for the job.

Credit Representative No. 422631 is authorised under Australian credit license No. 389328.
ABN: 84 374 662 284

This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.