Exploring Plant and Machinery Finance
- Emily Skellham
- Apr 15, 2024
- 3 min read
Discover the power of plant and machinery finance for your business. This financial tool allows you to get new equipment or upgrade existing ones, boosting efficiency and growth without straining your finances. Whether you're a small startup or a big company, plant and machinery finance gives you access to top-quality gear essential for expansion.
In this guide, we'll explore different options like leasing, hire purchase, and business loans, highlighting their benefits. Learn how plant machinery finance can help you access equipment quickly, protect your cash flow, upgrade your technology, and even save on taxes.
Table of Contents
Introduction to Plant and Machinery Finance
This finance method allows you to buy new machinery or upgrade existing equipment, supporting efficiency and growth. Plant and machinery finance helps you to advance your business with new or improved machinery, without huge financial strain. Regardless of your business's size, plant and machinery finance empowers you to access high-quality equipment essential for business growth.
What Types of Plant Machinery Finance Are Available?
Plant and machinery finance opens the opportunity for businesses to buy or lease expensive equipment without a large initial investment.
Your Plant and Machinery Finance Alternatives
Leasing:
Equipment leasing, also referred to as plant hire or contract hire, emerges as a favoured option due to its flexibility. Under this arrangement, you can opt to renew the lease, return the equipment at lease end, or purchase it outright at an agreed price. While you pay a fixed monthly fee for equipment usage, ownership remains with the lessor. Typically, maintenance costs and sometimes insurance are incorporated into the monthly payment.
Hire Purchase:
Hire purchase operates similarly to leasing, with the difference being an ownership transfer when payments are completed. This option is great if owning the equipment fits your long-term plan, but spreads payments out across a longer period.
Asset Finance:
Asset finance uses existing assets as collateral, supporting loan acquisition. Repayments are structured into monthly instalments over a set period. In the event of repayment default, the lender reserves the right to seize the asset.
Invoice Financing:
Invoice financing provides flexibility by converting unpaid invoices into available funds. Despite its usefulness in helping cash flow restriction, this option can lead to large fees and involves giving up control over outstanding payments.
Business Loans:
Conventional business loans offer a straightforward approach to equipment acquisition. These loans may be secured, using collateral, or unsecured. Repayment terms are typically structured with interest over a set period. Direct application through financial institutions or utilisation of online brokers facilitates access to a variety of lending options.
Benefits of Plant and Machinery Finance
Immediate Equipment Access:
It enables prompt equipment acquisition, boosting production capabilities without waiting for accrued savings.
Cash Flow Safeguard:
By opting for finance, businesses shield their cash flow from unnecessary pressure, reducing concerns over operational and unexpected expenses. Repayment flexibility further relieves cash flow pressures.
Upgraded Technology:
Finance allows for a seamless transition to newer equipment models, eliminating the need for large upfront capital.
Tax Advantages:
Depending on jurisdiction and leasing specifics, plant and machinery finance can allow for potential tax benefits, contributing to overall business savings.
Access to Cutting-edge Technology:
Utilising finance supports businesses in accessing cutting-edge technology, to aid internal upskilling and growth. Plant and machinery finance serves as a strategic tool for businesses seeking to optimise operations, enhance productivity, and navigate the ever-evolving landscape of technological advancement.
How to apply for equipment leasing
Enquire online with Approved or speak to one of our experts today for help.
A vast network of over 125 lenders and swift decision-making makes it possible to obtain funding in under 24 hours. We guarantee that your credit score won't be impacted by our no-obligation application. To begin with we'll need your name and business information as well as the amount of funding you're looking for.
Start your financial journey with us today. Check your eligibility here.
