A business might come looking for finance because it needs one truck, excavator, vehicle or piece of machinery today.
But that purchase may only be the beginning.
A transport business might need another truck in three months. An earthmoving contractor may buy an excavator and then need attachments. A growing business might secure another contract and suddenly need additional vehicles or equipment much sooner than expected.
This is where it can be worth looking beyond the invoice sitting in front of you.
The immediate purchase is only part of the finance conversation
Traditional asset finance is often approached one transaction at a time.
You find the asset, apply for finance, settle the purchase and then start the process again when another asset is needed.
That can work perfectly well.
However, some lenders may also assess whether the strength of the business supports additional asset purchasing capacity beyond the first transaction.
That does not mean every business will receive an additional limit, and it is not something every lender offers. Eligibility will depend on the lender, the business, its financial position and the assets being purchased.
For the right business, though, having finance capacity considered earlier can make the next purchase easier to manage.
A contractor may initially need $70,000 for a truck but know there is likely to be another machine, trailer or attachment required as new work comes in.
Instead of waiting until the next purchase becomes urgent, it may be worthwhile discussing the broader equipment plan at the beginning.
Why this matters for businesses buying equipment regularly
Asset heavy businesses rarely stop buying after one piece of equipment.
Transport operators replace and add vehicles.
Earthmoving businesses may need excavators, loaders, attachments, trailers and support vehicles.
Agricultural businesses may have machinery requirements that change with seasons, contracts and growth.
Construction businesses can win work that requires equipment they did not need six months earlier.
If another purchase is likely, having that conversation before the business urgently needs the asset can be useful.
It may also help when a machine appears unexpectedly through an auction, dealer, private seller or another supplier and there is limited time to make a decision.
If you’re already looking at another vehicle or piece of machinery, talk to Thrive Broking about the purchase you need now and what you expect the business may need next. We can review available machinery and equipment finance options rather than looking at the transaction in isolation.
What will a lender look at?
The assessment varies significantly between lenders.
Depending on the lender and transaction, this can include:
how long the business has been trading
business turnover
recent business bank statements
existing finance commitments
repayment conduct
current cash flow
financial statements where required
the type and age of the asset
the purchase price
whether the asset is being purchased privately, through a dealer or at auction
Some lenders place considerable weight on the strength and turnover of the business rather than assessing the asset alone.
Others may have tighter requirements around the age, type or resale value of the equipment being purchased.
That is one reason the lender that financed the first truck may not automatically be the most suitable lender for the next transaction.
An existing limit does not mean you should automatically use it
Having access to an existing lender or approved facility can be convenient, but the next transaction should still be considered on its own merits.
The asset may be different.
The amount may be different.
The business may have changed.
Another lender may have a stronger appetite for that particular asset or transaction.
At Thrive Broking, we can review the next purchase rather than assuming the existing lender is automatically the right place to put it.
This becomes particularly important for businesses buying unusual equipment, older machinery, attachments or assets that don’t sit neatly within every lender’s policy.
Tell us what the next 12 months could look like
When discussing truck finance or machinery finance, some useful questions are:
What are you buying now?
Is another purchase already being considered?
Have you recently won additional work?
Are you replacing equipment or expanding the fleet?
Will you need attachments, trailers or supporting equipment?
Are any existing loans approaching a balloon payment?
Are you buying from a dealer, at auction or through a private seller?
Understanding the bigger picture can help us decide whether it makes sense to simply finance today’s asset or consider a structure that also accommodates future purchases.
Finance before the equipment becomes urgent
One of the hardest times to start arranging business finance is after the equipment is already urgently needed on site.
If you know another truck, excavator, trailer, vehicle or machine is likely to be required, it can be worth having the finance conversation earlier.
Thrive Broking provides asset and equipment finance across Australia and has around 30 years of finance experience.
Tell us what you’re buying now, what the business is doing and what you may need next. We can review the available finance options before the next purchase becomes urgent.