It’s an understatement to say the past 18+ months have been challenging. We all know, we all get it! So as vaccination rates reach those critical percentages and millions of Australians get to celebrate their much-valued freedoms it’s tempting to give yourself the usual end-of-year break from the business grind. But before you shut down and log off, Jade Equipment Finance highlights reasons why business operators should be upgrading equipment and machinery now to get the jump on 2022 with cheap equipment finance.
The economic uncertainty of 2020 and 2021 has seen many businesses make decisions to invest in new equipment on the back burner. Taking a cautious ‘wait and see’ approach to major acquisitions. But there has been and continues to be a lot happening in both the supply of equipment and the lending scene which warrant revisiting and acting on those purchase decisions with a sense of urgency. The time to ‘wait and see’ has been replaced with getting on with it an act.
The lockdown of the construction sector first in NSW and then in Victoria was a pandemic surprise that pretty much no one saw coming. It hit many hard and one major take-out from the experience has to be the need for preparedness. Businesses need to be ready and well-equipped across their operation. That can mean not hanging around and waiting any longer to upgrade your equipment and machinery.
Interest Rates in General
Businesses in Australia have enjoyed historic low interest rates since the RBA started cutting the official cash rate as a stimulus measure in April 2020. Since dropping the rate to 0.1% in November 2020 and constantly repeating it did not expect conditions to trigger a rate rise until 2024 the RBA message has remained consistent.
But there are loud mutterings and expert commentaries as well as changes in key indicators that may signal an earlier than expected rise in the official cash rate. Inflation and wages growth are both key indicators for an RBA rate change and both these data have posted recent increases. Not in the region set by the RBA but moving in the upward direction.
While the official cash rate is a base for most banks and lenders to set their own interest rates, the lending market does have other factors to take into account. Especially their own costs of borrowings which can be impacted by global economic conditions. In what is thought to be a response to this issues, some home mortgage lenders have already lifted their rate on 2 year fixed home loans. While different from equipment finance rates, the same borrowing costs do have the potential to affect equipment lenders also.
Equipment Finance Interest Rates
As we base our entire business on cheap and better equipment finance interest rates, we continue to offer cheap rates across our portfolio. Finance products can be secured at a fixed rate of interest over the full finance term. With finance terms of up to 7 years available, businesses have the opportunity to achieve peace of mind moving forward, with a cheap equipment loan locked in now at current cheap rates.
Gearing Up to Capture Opportunities
Upgrading machinery, plant and equipment now, has the potential to place a business in an improved position to capture new business, work and market opportunities as they emerge in early 2022. We point out a few factors for consideration to back up this statement.
- Governments at all levels continue to invest heavily in infrastructure projects. The stimulus projects continue to roll out and reach new stages and new opportunities in addition to new major initiatives being announced on an ongoing basis.
- Issues overseas that are affected the supply chain can have a beneficial side effect for some loan manufacturers. Those that are well-equipped to step back and fill the void for goods left by lack of international stock reaching Australian customers.
- The construction sector has already shown signs of recovery and those with machinery and equipment in good condition can be in a more favourable position to win highly prized tenders and contracts.
- It’s Election time! A number of state bi-elections are scheduled in NSW and the Federal Election is due in the relatively near future – probably within 6 months. That signals policy roll-outs and usually work opportunities for many.
- Increase profitability through improved productivity of new machinery and equipment.
- Realise cost savings in more energy efficient machines.
- Take advantage of temporary full expensing and loss carryback ASAP and in this current financial year.
Stock Supply Issues
The global supply chain is an ongoing issue for numerous reason. Computer chip shortages shut down many factories, COVID caused slow-downs and delays and now spiralling shipping costs and delays are causing more problems.
A potential further set-back could be experienced from the flow-on effects of a fourth COVID wave currently breaking in some European countries. Austria is the latest to impose new lockdown restrictions on its population. If this outbreak expands and grows further, we could see more manufacturing shutdowns which could further delay delivery of machinery and equipment to the Australian market. Buying now from what stock is available in local dealerships can be a wise decision.
Sourcing Equipment Finance to Make that Purchase
We’ve presented a range of factual and compelling reasons for business operators to just hold off on clocking off this December. Instead, proceeding with the purchase of new equipment to be ready to ‘seize the year’ when industry gets back to work in January 2022.
Our team at Jade Equipment Finance is readily available to handle your equipment finance requirements with finance products at cheap interest rates to suit all types of equipment and all types of business operations.
Contact Jade Equipment Finance on 1300 000 003 to discuss securing finance for an end of year equipment acquisition.
DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.