There have been significant changes to the way many people work due to the impacts of coronavirus in 2020. Many have changed careers completely, some have pivoted to new areas and others have taken the opportunity to go it on their own and set-up their own business operation. Of course it doesn't take a pandemic for new operators to branch out into their own business. Tradespeople achieving their qualifications, the desire to achieve personal goals, changes at a place of employment and general personal preferences are just some of the catalysts for change.
Setting up your own operation as say a sub-contractor or contractor in construction, earth-moving, the trades and many other industries can be exciting and rewarding over the long term. But the initial steps and stages can come with challenges that in many cases can be seen more as massive obstacles. Primarily we’re talking access to the business equipment finance for you.
If your business is as an owner-operator of a specific type of equipment say a grader, back hoe, crane or other type, or you’re a tech or tradie and need the right tools to deal with the jobs you’re quoting, being a new business can pose problems when applying for equipment loans.
A quick browse of the equipment loan criteria on several major bank websites and you may see ‘in business for 12 months/2 years’ as a minimum requirement. If you’re starting out and need that equipment to carry out the work, it can be a catch 22 scenario. Without the finance you can’t acquire the tools and equipment and without the gear you can’t do the work and without the work – well you don’t have a business.
Enough of the negatives, you should realise that at Jade Equipment Finance – we get it! And we can get finance for new business set-ups. As a lender with a wide scope of interests, we are accredited with both banks and non-bank lenders. Non-bank lenders are finance companies, many of which are specialists in equipment finance and some deal specifically with brokers and lenders such as Jade, not directly with business. These specialist lenders are more flexible when it comes to loans for new operators and we can provide access to these finance channels for operators that are setting up their own businesses.
New Business Equipment Finance
Jade Equipment Finance has access to a network of lenders that provides specialty finance requirements. These we refer to as ‘low docs or no docs’ loans. Docs refer to the documents or financial documentation which banks and some other lenders require for an equipment loan.
Most new businesses won’t have extensive documentation and accounts records so they will need a low docs loan. This category of finance covers a number of specific applicants:-
- ABN Only Equipment Finance
- Low Docs Equipment Loans
- No Docs Equipment Loans
The basics of each of these three is similar with the main difference being the quantity of documentation the operator can provide to support their application.
Loan Criteria
To be eligible for a Low Docs Loan, applicants will require:-
- Current ABN
- Identification as required with all major financial dealings
These (above) are minimum requirements and non-negotiables.
- Being registered for GST is not an essential criteria but can be viewed favourably by some lenders.
- Having a good credit profile is very important.
In addition, the more documents an applicant can produce the stronger the application. Documents may include:-
- Financial business accounts such as expenses/income records. These can be prepared by a professional accountant or simple accounts as prepared by the business owner.
- BAS statements if registered for GST.
- Bank statements.
- Profit/loss statements and assets/liabilities.
- Business income tax returns.
- Some lenders may request a Business Plan.
- Some lenders may request personal financials for the business owner(s). This may include assets/liabilities records and personal tax returns.
Your Jade consultant will advise and assist with your application. Don’t worry if you don’t have all the docs as listed. No Docs Loans by the very name presumes none if very little documentation will be provided to support the application.
Loan Conditions and Features
If approved for a low docs/no docs equipment loan, the business can enter a contract for a Chattel Mortgage, CHP, Leasing or Rent-to-Own. In many cases the interest rates that are achieved for a fully documented loan can be achieved for a low docs loan BUT additional conditions are usually attached to the loan.
Conditions will depend on individual lenders but may include:-
- Applicant having a good credit history and profile.
- Additional property/assets to put as security against the finance in addition to the equipment being purchased.
- Limits on the total loan amount provided.
When sourcing your loan, your Jade consultant will be working towards achieving the optimum conditions for you.
Applying for a Low Docs Equipment Loan
Low Docs and ABN only loans are achievable for the purchase of a large range of equipment used in many industries. To apply for a loan, simply call us and you will be appointed your own consultant to source you the best offer for your loan. Your consultant handles all the discussions and liaison with the lenders and negotiates on the best interest rates and loan conditions.
So if the bank has already rejected your finance application or if you would like to bypass the hassle and opt for a professional, streamlined approach to your loan requirements, just contact us for a no obligation initial discussion.
To discuss the loan options for new business set-ups, contact Jade Equipment Finance on 1300 000 003
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