With interest rates at historic lows, now could be the time to see if you can grow your business by acquiring new working assets or restructuring your finances.
There are a wide range of equipment finance solutions available, offering potential tax and cash flow benefits. If you have identified an opportunity to upgrade or expand, here are some suggestions on how to ensure you’re not paying over the odds for the equipment and finance you need.
How to save on vehicles and equipment
When you’re buying business vehicles or equipment it can be tempting to go with the lowest advertised interest rate. The offers can be compelling – you can choose what you want (if in stock), get finance approved on the spot and organise fast delivery, or even drive away with a new vehicle on the same day. And with nearly half (49.8%) of businesses preferring motor vehicle finance from the dealer, these offers are clearly popular". 
Make sure you ask these key questions to ensure you’re getting the deal you need.
- Does a low interest rate (sometimes lower than mortgage rates) really mean you’ll end up paying less over the life of the agreement?
- Does the finance include any up-front cash payments?
- Do the repayment amounts and dates match your business cycle and your cash flow needs?
- Are there extra fees and charges in the contract?
You should also check the fine print. There may be conditions, like a restricted selection of models or variants that mean you don’t get exactly the equipment you could have in mind, or that you pay a higher price to get specific models or features.
So how do you get a good deal? We recommend a two-stage process. Negotiate your finance first, and separately, with an established finance provider. You can arrange fast pre-approvals and you’ll get better buying power. Then, finance already sorted, you can concentrate on negotiating the best price for the right equipment.
Refinance at low rates to retire debt and grow your business
You can also improve your business capital and cash flow positions by refinancing existing agreements. Taking advantage of the current low-rate environment may mean you can lower your repayments or pay off your equipment faster. This would depend on whether refinancing costs or break costs apply.
Some finance providers can transfer your existing fully owned vehicles and machinery to finance or leasing agreements. This will release equity to put to work in other areas of your business.
Get a handle on your terms of trade
It’s worth thinking about securing equipment finance with a bank or finance partner who provides a full range of banking solutions. Look for value-adding features and services, like real-time reporting within your transaction banking and benchmark information for your industry. You want a partner that can help you remain competitive.
There are many ways to use asset finance to benefit your business and now is a great time to consider your options. So do your homework, find a provider you trust, negotiate the purchase price and the finance package separately, and free yourself to concentrate on making your business a success.