Asset financing is a type of financing where a business borrows money to purchase assets such as vehicles, equipment, and inventory. The lender might be a bank or other financial institution that provides the funds used to buy the asset, which serves as collateral for the loan. The borrower then makes payments on the loan over an agreed-upon period, usually with an interest rate attached. The borrower is then able to use the asset as a means of generating revenue or increasing productivity.

Asset financing is a financial arrangement through which businesses in Australia can acquire the use of an asset without having to pay for it upfront. The asset’s cost is spread over time and paid back with interest according to a repayment plan agreed upon by both parties.

Both conventional lenders (like banks) and private lenders offer equipment and asset finance in Australia. Traditional lenders, however, typically have more stringent requirements for granting such types of loans. For instance, If you have missed any credit repayments (or failed to make them on time) over the last seven years, you may have a low credit score. With a lower credit score, banks are more likely to reject your application.

However, if you work with Diverse Funding Solutions, a private lender, you can discover that:

• It’s easier to obtain speedy approval for equipment or asset financing.
• You can negotiate flexible repayment arrangements that work with your company’s cash flow.
• You can seize possibilities in the fiercely competitive business market thanks to quickness and adaptability.

We understand that each business is different and there’s no one-size-fits-all approach to asset finance, so we consider the nature of your business, your objectives and your financial situation to tailor a package that works specifically for you. Our team is highly experienced in asset finance and can provide you with the best advice for your situation.

By giving us the necessary information, you may obtain asset financing on the best terms. Additional elements that may affect the requirements for asset financing include:

• The financial option you select
• The kind of asset or equipment you need to finance
• The nature of your business

Diverse Funding Solutions can finance a variety of assets, ranging from vehicles and machinery to commercial real estate and business expansions. Some of the types of assets that can be financed with this include:

• Technology
• Business vehicles
• Office equipment
• Operational machinery to produce goods or deliver services
  Shop fit-outs

Diverse Funding Solutions can offer competitive rates and financing options that are designed to meet the needs of any business, no matter how big or small. With flexible repayment terms and competitive rates, Diverse Funding Solutions makes obtaining the assets your business needs easy while staying on budget.

The answer is yes. Even if you have bad credit, you may still be able to obtain financing for business assets with Diverse Funding Solutions. With connections to 200 lenders, we specialise in providing business asset financing for everyone, regardless of their bad credit rating.

Business equipment and asset finance can be used for a broad range of items. For example:

• Operational machinery to produce goods or deliver services.
• Shop fit-outs.
• Business vehicles.
• Office equipment.
• Technology.

There are a range of business equipment and asset financing options available in Australia, including:

• Leasing.
• Hire purchase agreements.
• Chattel mortgages.

The most appropriate option will depend on your specific business situation, needs and goals.

Leasing

Business equipment/asset lease agreements are effectively rental arrangements where you don’t ever assume ownership of the financed item. However, some lease agreements may give you the option to buy the equipment/asset at the end of the agreement.

There are three major types of business equipment/asset leases:

1) Finance leases.
2) Operating leases.
3) Novated leases.

A finance lease is often used for high-value equipment and assets over medium to long terms. You are responsible for repairs and maintenance during the lease term.

An operating lease on the other hand is typically a short-term agreement for equipment or assets that may quickly become obsolete. These leases usually allow you to upgrade your equipment/asset, which is something you can’t do with a finance lease.

A novated lease can be used for a business vehicle as part of a salary packaging arrangement to pay less tax. Lease payments are made from pre-tax salaries to reduce taxable income. Novated leases are usually short-term arrangements (e.g. for three years). At the end of the lease term , you usually have the option to buy the vehicle. Alternatively, you may be able to extend the lease or take out another one on a new vehicle.

Hire purchase agreements

A hire purchase agreement is similar to a lease. However, at the end of the agreement, ownership of the equipment/asset will transfer to your business. You will fully pay for the value of the equipment/asset (plus interest) over the term of the hire purchase agreement.

Chattel mortgages

A chattel mortgage is a secured loan for a business vehicle. The car is collateral security for the loan. This means that the lender can legally repossess the vehicle if you don’t make your repayments. They can then sell it to recoup any amount owing.

You can get equipment and asset financing on the best terms by providing your lender with

appropriate collateral security for your loan. This security reduces the lender’s risk and increases your chances of finance approval on the best possible terms.

Interest rates on equipment/asset finance can also depend on a range of other factors, including:

• The finance option you choose.
• The type of equipment/asset you need to finance.
• The type of business you have.

You can get equipment and asset financing from both traditional lenders (like banks) as well as private lenders in Australia. However, traditional lenders usually have stricter lending criteria for approval. For example, they will be more likely to reject your application if you have a bad credit score. You can have a bad credit score if you’ve missed any credit repayments (or not made them on time) over the past seven years.

On the other hand, if you use a private lender, you may find it easier to:

• get your equipment/asset finance approved quickly.
• negotiate flexible repayment terms that suit the cash flow of your business.

This speed and flexibility can allow you to capitalise on opportunities in the highly competitive business environment.