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The benefits of equipment finance for your business

8 November 2021 | 4 min read

Businesses are getting ready for the post-pandemic recovery period. And with a range of tax incentives on offer from the federal government, demand for equipment finance continues to be high.
 
We spoke with our head of cash flow products and strategy, Andrew Vines, who says many businesses are gearing up for growth.
 
“There is strong demand for finance, particularly in civil construction, mining and agriculture as these sectors thrive and embrace new technologies to improve productivity” Andrew says.
 
So what is equipment finance?
 
Equipment finance is a flexible and convenient source of funding to assist businesses across many industries as they grow and look to invest in new vehicles, plant and equipment.
 
“Our customers finance a very broad range of assets through our equipment finance facilities. We see things like cars, trucks and trailers. Buses and coaches. Earth moving equipment, tractors, harvesters and agricultural equipment. Engineering plant, concrete pumps and mobile cranes. Medical equipment including x-ray and radiological equipment. Laptops, servers and other computing assets” Andrew says.

Reaping rewards

It’s a competitive business environment, so it’s more important than ever to use current technologies. Purchasing new vehicles and plant and equipment helps to maximise productivity, minimise downtime and repair costs. The end result is providing the best possible products and services for customers.
 
“Investing in new assets is often very expensive. When purchased using cash reserves, it can impact cash flow and the ability to meet other business working capital demands. Equipment finance allows businesses to preserve capital and pay for the asset over an extended period. This is generally up to five years as increased income is being generated and often with added tax benefits,” says Andrew.
 
“The equipment finance facility is typically secured only against the asset being acquired. This means it won’t encumber the business owner’s personal or commercial property that may be required to support other borrowing needs,” he adds.

Lived experience

AVIS Ballarat is a great example of a business that has benefited from Bendigo Bank’s equipment finance solutions.
 
"Bendigo has supported us to invest in vehicles that take us from strength to strength and backs us through market cycles,” says owner Darren Rix.
 
We're proud to have supported AVIS Ballarat through a number of growth initiatives. This included the financing of a new showroom and adding another franchise to the business in west Melbourne.
 
“Bendigo takes a long-term view of our business. The bank is always happy to provide finance facilities to support our growth and loan repayments are structured to suit our need,” says Darren. 

“For us, it’s all about helping our customers to build the best businesses they can in the most efficient and cost-effective way" Andrew adds.
 
With the new year only a couple months away, now is a good time to place vehicle and equipment orders. Start the new year in the best possible position to take advantage of a likely post-pandemic economic upswing.
 
It’s also a great opportunity to take advantage of interest rates that are close to historically low levels. Plus the Federal Government’s instant asset write-off incentive. This allows businesses to immediately deduct the cost of an asset for tax purposes, in the year it is first used or installed ready for use.
 
“Equipment finance has continued to be a great funding solution for our business customers ” Andrew says.

Any advice provided in this article is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should assess with the help of legal, financial and taxation advice, whether it is appropriate for your situation before acting on it. Please read the applicable product disclosure statement(s) on our website before acquiring any product.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

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