Asset Finance examples

We've put together three example scenarios to help you better understand how easy asset finance makes getting tools you need to give your business a competitive edge.

1. Updating tech with an equipment rental

Over the past 12 months, a full-service creative agency, has doubled its clients and the design team is struggling to keep up with demand...what a great problem to have!

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Their current computers are outdated and slow, resulting in prolonged downtime and frustrated graphic designers. Sally, the creative director, has decided that upgrading her team’s equipment will help them be more productive and offer a better experience for their customers.

The new computers and equipment her team needs will cost around $15,000. There just isn’t that kind of spare cash in the budget, but with the steady stream of new clients coming in, she is confident that they will easily be able to make repayments on a loan.

Sally knows that in order to stay ahead of their competition, they will continually need to keep their tech capabilities up to date. Rather than purchasing the computers outright, Sally is looking for an option that will allow her team to upgrade their equipment every few years without any extra cost.

Loan type: Equipment rental
Amount needed: $15,000
Term: 2 years
Estimated monthly repayments: $823

2. Growing a cafe with a commercial loan

A busy cafe on the main street of a CBD has recently taken over the lease of the vacant shop front next door to expand. The local council has recently finished a CBD revitalisation project and the owner, Jeremy, has noticed an uptick in foot traffic and bookings through the cafe’s website. To take advantage of the increase in customers, Jeremy wants to add more cold storage space, install a pizza oven and increase the cafe’s seating capacity.

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He is looking at spending close to $40,000 on all of the new equipment the cafe will need, including tables, chairs, light fixtures and flooring, in addition to a new walk-in fridge and freezer and pizza oven.

All of the items Jeremy wants to buy will have a long useful life, and he’s not anticipating another expansion within the next five to six years. To avoid leaving the business short of cash, Jeremy decides to go with an equipment loan to fund the equipment purchases. He chooses a 20% residual payment to help keep his weekly repayments down over the three-year loan term.

Loan type: Equipment loan
Amount needed: $40,000
Term: 3 years
Estimated monthly repayments: $1,415
Residual amount: $8,000

3. Fitting out a new call centre with a commercial loan and an equipment rental

A transport company with branches across Australia is hiring new customer service representatives and needs to update and expand its call centre. The company is known for its industry leading logistics technology and exceptional customer service.

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The customer service team will need new computers, phones, desks and chairs to accommodate five new staff. Management plans to spend $30,000 on the new office fit out, $20,000 of which will go towards the computers and phones, and $10,000 towards the furniture.

Management decides to take out two separate finance arrangements to cover the assets with varying life spans. For the computers and phones which will likely need replacing in a few years' time, they opt for an equipment rental so they can easily upgrade. For the furniture, they decide on an equipment loan because they want to own the assets outright at the end of the loan.

Loan type: Equipment loan
Amount needed: $10,000
Term: 3 years
Estimated monthly repayments: $392
Residual amount: $0

Loan type: Equipment rental
Amount needed: $20,000
Term: 2 years
Estimated monthly repayments: $1,097

With an equipment loan, you purchase the equipment and use its value as collateral. You can adjust your repayment amount by choosing how much residual (left over amount) you pay or refinance at the end of the term.

An equipment rental means that you will always be able to keep up with the latest tech changes and industry developments without shelling out a large lump sum every few years. At the end of the rental term, give the asset back to us and you can upgrade to the latest version.

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The type of finance you will need will depend on whether you want to own or rent the equipment your business needs. Our compare page has more detailed information, or you can contact us directly with any questions you may have.

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If you have any other questions about Bigstone asset finance, use the button below to contact us via phone or email.

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Loan Comparison Guide

With so many lenders quoting so many different interests rates and loan types knowing how to pick the right one for your business can be a challenge.

We've put together this handy guide to help you better understand the loans available and feel confident that you've made the best decision possible. 

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