As the clean-up continues and the full extent of the flood damage is realised in northern NSW, areas of Greater Sydney and in SE Queensland, many businesses face the onerous task of replacing machinery, equipment and plant lost in the deluge. The mere thought can be overwhelming. To assist businesses to replace flood-damaged equipment quickly and easily with cheap machinery finance this guide may streamline the process.
As addressed in a previous post, banks and lenders have announced loan assistance and direct cash assistance is being made available through both State and Federal Governments. For business, a major priority will be getting the operation back into some form of working order. Possibly only a few pieces of machinery have been written off or possibly it is the complete business.
Regardless of the extent, even if the equipment lost is currently under finance, Jade Equipment Finance is well-placed to assist businesses with quick service to secure finance to make new acquisitions.
We address a number of concerns and questions in this easy-to-follow Q&A format as a preliminary step on the process.
Who should be my first contact point for equipment under finance?
If machinery or equipment under finance has been damaged beyond repair or swept away and lost, both the insurer and the lender should be contacted. When purchasing machinery and equipment with finance, taking out insurance is a condition requested by lenders. Individual insurers will have their own processes and procedures for lodging claims. The lender that holds the finance should also be contacted to be advised of the circumstances. The lender will discuss how you should proceed from their point of view.
What if I have lost my paperwork and financial documents?
In regard to making an insurance claim, insurers have stated that it is not an issue if the policyholder does have their policy documents. They will handle that. The same should be so for the finance. However, when it comes to applying for new machinery finance, businesses are required to provide financial information. In the event of an entire business being inundated, as has been the case for sadly many operators, the hard copies and computer-held records may also have been lost. If digital records of documents were secured in a cloud-based platform they should be retrievable.
Accounting records may be retrieved via the business accountant. The ATO may also be able to assist with retrieving records of BAS returns and income tax records. Your Jade Equipment Finance consultant may also be of assistance in tracing and tracking records of other loans and financial history through credit profiles, PPSR and other sources.
Another option is also Low Docs and No Docs Equipment Finance for those without all the documents to complete the application form.
What happens with finance repayments on written-off machinery?
The obligation remains to continue meeting the repayment schedule until the insurance claim is settled unless alternative arrangements can be agreed with the lender. This is why it is important to contact the lender. The insurer will settle the claim by paying what is due to the lender and the balance to the policy holder. Failing to meet repayments and not informing the lender may lead to default entries on a credit report which can lead to bad credit ratings.
Can I replace the machinery prior to the settlement of the insurance?
Yes. Businesses can apply for new loans while the insurance claim on the current machinery under finance is being processed. Your Jade consultant will handle the quote sourcing and negotiating the cheapest deal so you can focus on the myriad of other matters you most likely have to deal with at the present time.
Finance for replacement equipment may be with the same or a different loan product to the finance on the damaged machinery.
The selection of finance types includes:
- Equipment Lease
- Chattel Mortgage
- Rent to Own
- Hire Purchase
Pre-approved finance can be arranged on the choice of finance product so you are well-positioned to start placing orders to secure the new equipment.
If delivery, installation and commissioning costs are attached to the purchase, mention this to your Jade consultant re including the expense in the total loan amount.
How can you assist to speed up the process as the equipment is critical for my business?
We can assist significantly in this regard. On contacting Jade Equipment Finance, our customers are assigned their own consultant to handle their loan requirements. That provides a direct, one person point of contact through the entire process. Your consultant will source the cheapest quote from across our vast lender base, handle the paperwork and even liaise with the equipment dealer to expedite settlement.
Will the circumstances affect the interest rate on the finance for the new equipment?
Each application is assessed on individual details and replacing lost or written-off equipment or machinery should not in principle, impact the interest rate offered. We will be sourcing quotes for the new finance based on the current interest rates. These rates may be different from the interest rate offered on other previous loans. Review the current rates we are achieving on equipment finance in our guide.
Will this process impact my credit rating?
Making an insurance claim does not in itself typically provide a reason for any negative impact on a credit score. But as mentioned above, the loan repayment schedule must continue to be met or arrangements made with the lender in order to avoid any negative effects on the credit score.
The team at Jade Equipment Finance fully understand the circumstances facing businesses that have been impacted by the recent floods and rain events. Our services are fully operational and we welcome your call for assistance in quickly sourcing finance to replace machinery, plant and equipment.
Speak with a Jade Equipment Finance consultant on 1300 000 003 to discuss finance to replace flood-damaged equipment
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.