How to Prepare Your Business for Equipment Financing
Financing new equipment can be a game changer for your business! Boosting productivity, increasing capacity, and helping you stay competitive. But before you apply, taking a little time to prepare can greatly improve your chances of approval, streamline the process, and potentially help you access better rates and terms.
Whether you're purchasing a single machine or an entire fleet of equipment, here’s how to get your business finance ready.
How to prepare your Business for Equipment Financing
1. Understand what you need and why
Before approaching lenders or brokers, be clear about:
- What equipment you're purchasing
- Why it's needed (e.g. replacing outdated machinery, increasing production, entering a new market)
- How it will generate income or improve operations
Being able to explain the commercial benefit of the equipment shows that you’re making a strategic investment, not just spending money.
2. Know your numbers
Lenders want to understand whether your business can afford the repayments. Be ready to provide:
- Recent financial statements (Profit & Loss, Balance Sheet)
- Business Activity Statements (BAS)
- Cash Flow forecasts or budgets
- Bank Statements (business and/or personal)
- Outstanding debt or existing finance agreements
If your financials are still in progress (e.g. new financial year), interim figures or an accountant's summary can also be helpful.
3. Get your documentation in order
While documentation requirements vary by lender and product type, common items you'll need include:
- Valid ABN and GST registration
- Director/owner identification
- Asset and liability statement
- Quote or invoice for the equipment
- Trust deed or company ASIC information (if borrowing under a trust or company)
Being organised with this paperwork upfront can significantly speed up approval.
4. Check your Credit Profile
Lenders will review both your business and personal credit history, especially if a director's guarantee is required. A good credit score gives confidence that repayments will be made on time.
Tip: If there are any defaults, missed payments, or other issues on your report, be transparent and prepared to explain them with context (e.g. a one-off event, COVID related impact, etc.)
5. Consider how you'll structure the finance
There are several options when it comes to equipment finance, and the right one depends on your tax position, cash flow and long-term plans. Common structures include:
- Chattel Mortgage
- Finance Lease
- Operating Lease
Your accountant or broker can help determine which option is most tax-effective and cash flow friendly for your business.
6. Work with a Finance Broker
Even if your business is well-established, working with a broker can offer huge advantages:
- Access to a wider panel of lenders
- Better chance of approval (especially for more complex structures or industries)
- Negotiated rates and flexible terms
- Support throughout the entire process, from structuring the deal to settlement
A broker can also guide you on how to strengthen your application and save you time by managing the paperwork and communication with lenders.
Final Thoughts
Preparing your business properly before applying for Equipment Finance gives you the best chance of securing the right solution, quickly, and on the best possible terms. With the right support and a clear strategy, Equipment Finance can be a powerful tool to grow and future proof your business.
Need help getting Finance-Ready?
At RLA, we work closely with businesses of all sizes to structure tailored Equipment Finance solutions. Contact us today for expert guidance and personalised support.