You’ve won the work.
There’s enough in the contract to make the job worthwhile, the start date is approaching and the customer is ready for you to mobilise.
Then you look at the equipment required to actually deliver it.
Maybe you need an excavator. A skid steer. A loader. A crane. A forklift. A compressor. A specialised trailer. Perhaps you need several pieces of equipment at once.
The job will generate revenue, but the equipment has to be paid for before much of that revenue arrives.
For businesses around Mackay taking on new contracts, this can create an awkward funding gap. You have the work, but you don’t yet have the productive assets required to perform it.
That’s when equipment finance becomes part of the mobilisation plan rather than simply a way of buying machinery.
Start With What the Contract Actually Requires
Don’t start by asking:
“How much can I borrow for an excavator?”
Start with the work.
What have you agreed to deliver? When does the job begin? What equipment is essential from day one? What can be added later? What equipment do you already own?
A civil contractor might need an excavator and skid steer immediately but not require another truck for three months.
A fabrication business might need a new machine before production begins.
A warehouse operator could need forklifts before taking possession of additional stock.
Understanding the work tells us which purchases are actually urgent.
Owning the Equipment Isn’t Always the Only Answer
Before buying, compare ownership with the alternatives.
Could you hire the machine?
Could you subcontract part of the work?
Could existing equipment be redeployed?
Would hiring make sense for the first few months while you establish whether the additional workload will continue?
For a short contract, purchasing a highly specialised machine may create a long-term financial commitment for a short-term requirement.
For ongoing work, continually hiring an asset the business uses every day may be less attractive.
The finance decision should follow the operational decision.
Calculate What the Asset Will Really Cost
The dealer’s purchase price may only be part of the investment.
Depending on the equipment, you might also need:
attachments
buckets
forks
specialised tooling
safety equipment
GPS or machine-control technology
delivery or freight
installation
commissioning
modifications
other eligible accessories
If you know these items are required, tell us at the beginning.
A $180,000 base machine that requires another $45,000 before it can perform the contracted work is really a $225,000 equipment requirement.
Finance should be considered around the asset you’re actually putting to work.
What If You Need Several Machines?
This is common when a business expands quickly.
Perhaps the new contract requires an excavator, skid steer and trailer.
Or the business needs three forklifts for a new warehouse.
You might not take delivery of all the equipment on the same day.
Tell us about the complete programme anyway.
Depending on the lender, business and transaction, there may be options to consider multiple eligible assets or establish a broader asset finance facility rather than treating every purchase as though it is unrelated.
The precise structure depends on the lender.
But knowing that more purchases are coming can influence how we approach the first transaction.
Don’t Use All Your Working Capital as the Deposit
A business owner can become so focused on obtaining the equipment that they overlook what happens after delivery.
Suppose you have $120,000 available in the business.
You could put $100,000 towards the machinery and substantially reduce the amount financed.
But the new job may also require wages, fuel, materials, accommodation, freight and subcontractors before the customer pays you.
That $100,000 might be more valuable supporting operations than sitting entirely in the equipment.
This doesn’t mean financing the maximum possible amount is automatically better.
It means the deposit decision should be made alongside the business’s working-capital requirements.
The Equipment and Working Capital May Need Different Finance
Imagine the business needs a $300,000 excavator and another $150,000 to mobilise the project.
Those are two different requirements.
The excavator is a tangible productive asset.
The additional $150,000 might cover wages, fuel, materials and other operating expenses.
Equipment finance may be appropriate for the machine, while a separate business or working-capital facility could potentially be considered for eligible operating requirements.
Don’t try to force every expense into the machinery transaction.
Tell us about the whole project so the funding needs can be separated properly.
What If the Equipment Is Used?
Used equipment can be an excellent option when the right machine is available.
It may reduce the capital required and, in some cases, allow the business to obtain equipment faster than waiting for a new machine.
But the actual asset matters.
Age, hours, condition, value, seller and expected remaining working life can influence the transaction and available lender options.
A ten-year-old excavator with a documented history and appropriate condition is a different proposition from a machine with uncertain hours and limited information.
If you’ve found used equipment, send us the details before assuming the finance will work exactly the same way as a new purchase.
Buying Privately?
Equipment can also be purchased privately.
In a financed private transaction, the seller and ownership of the asset need to be verified.
The equipment needs to be appropriately identified, and relevant searches or other documentation may be required.
If existing finance or another registered security interest is identified, that needs to be dealt with appropriately as part of settlement.
Don’t hand over a large payment to a private seller and expect the finance to be sorted afterwards.
The transaction needs to be structured correctly from the beginning.
Buying at Auction?
Auctions can provide access to a wide range of equipment, particularly in construction, transport, agriculture and mining-related industries.
But the payment timetable can be tight.
Before bidding, understand the auction terms, buyer’s premium and payment deadline.
Then talk to us about the finance position.
Winning an excavator on Wednesday and discovering that cleared funds are required by Friday is not the ideal time to begin a finance application.
If you’re planning to bid, start the conversation before the auction.
The Cheapest Machine Can Become the Most Expensive
Price matters, but downtime matters too.
Suppose you save $40,000 buying an older machine.
Then it spends six weeks off the job during the first year.
What does that cost the business?
You may need to hire replacement equipment.
The contract could be disrupted.
Employees may be standing around.
Repairs may be required while the finance repayments continue.
Used machinery doesn’t need to be perfect, but the purchase decision should account for reliability and the consequences of downtime.
Finance approval isn’t a mechanical inspection.
What Happens When the Contract Ends?
This question is particularly important when equipment is being purchased for a specific job.
If the contract lasts 18 months but the equipment finance continues for five years, what happens after the first 18 months?
Can the machine be redeployed to other work?
Does the business already have a pipeline of similar projects?
Is the equipment commonly used across the operation?
Or is it so specialised that its value to the business depends almost entirely on one contract?
A productive asset should ideally have a role beyond the job that justified buying it.
What If the Customer Cancels or Reduces the Work?
Winning a contract is encouraging, but business risk doesn’t disappear.
Read the contract.
Understand the term, termination provisions and volume commitments.
A five-year agreement with minimum work requirements creates a different level of certainty from a customer simply indicating that substantial work is expected.
Finance repayments remain the business’s responsibility even if the customer relationship changes.
The strength of the underlying work should form part of the equipment decision.
Should You Choose a Balloon or Residual?
Depending on the equipment finance product and lender, a balloon or residual payment may be available.
Leaving an amount outstanding at the end can reduce scheduled repayments during the term.
But that remaining amount still needs to be dealt with later.
If you’re considering a balloon, think about the expected value and use of the equipment at the end of the finance term.
Will the business keep it?
Trade it?
Sell it?
Could the equipment still be worth enough to support the planned exit?
A balloon should be part of the asset strategy, not simply a tool for making today’s repayment look smaller.
Think About the Finance Term Against the Asset
A longer term can reduce the regular repayment.
But don’t look at repayment alone.
Consider how long the business expects to use the equipment, its age at the end of the term and the total finance commitment.
Financing an older asset over a long period may create a situation where the business is still paying for equipment that requires substantial maintenance or replacement.
The term should make sense in the context of the asset.
What About GST?
GST can affect the cash required in an equipment transaction and the way the purchase is considered by the business.
The appropriate tax treatment depends on the business and finance structure.
Speak with your accountant or registered tax adviser about GST, depreciation and tax deductibility for your circumstances.
A broker can explain the finance structure, but tax advice belongs with the appropriate tax professional.
If GST creates a material short-term cash requirement for the transaction, tell us so we understand the complete funding position.
What Information Should You Have Ready?
If the equipment is being purchased because you’ve won new work, tell us about both the asset and the job.
Depending on the application, useful information may include:
equipment quote
make, model and year
whether the equipment is new or used
seller details
proposed deposit
business trading history
financial information
existing equipment finance
details of the new contract or work
when the equipment is required
other planned equipment purchases
Requirements vary between lenders and transactions.
You don’t need to decide which lender or product you want before contacting us.
Start with what the business needs to buy and why.
Equipment Finance Around Mackay
Businesses around Mackay can operate in industries where equipment isn’t optional.
Civil construction, earthmoving, transport, mining services, agriculture, manufacturing and other industries rely on productive assets to deliver the work.
If a new contract requires additional machinery, don’t wait until mobilisation week to work out how the equipment will be funded.
Understand what is required, when it’s required and what the business needs to spend before the contract begins producing cash.
Won the Work and Need Equipment?
Send Thrive Broking the equipment quote, approximate deposit, required delivery date and details of any other machinery you’re expecting to purchase.
If the new job also creates a working-capital requirement, tell us about that too.
We can investigate equipment and business finance options based on the complete requirement rather than looking at one machine in isolation.
Winning the job creates the opportunity. Having the right equipment and enough working capital to actually deliver it is what turns that opportunity into business.