What is equipment finance?
Equipment finance is your business’s backstage pass to all the good stuff—whether that’s forklifts, coffee machines, or the latest tech—without having to buy every shiny object outright. Think of it as leasing a jet ski for the summer instead of buying a yacht for a lifetime. By letting you rent or lease what you need, when you need it, equipment finance keeps your working capital out of lockdown and matches your investments with real business demand. It’s the financial equivalent of having your cake, eating it, and saving some for the next board meeting—no matter if you’re running a factory, a design studio, or the café everyone loves for flat whites.
What are my Equipment Finance options?
There are many options for SMEs, allowing them to secure the necessary equipment for their operations. These include the following:
Hire Purchase
With a hire purchase, you simply make regular payments over an agreed period, and once you reach the finish line, the equipment is all yours. Throughout the term, both the asset and what’s left to pay are shown on your balance sheet, giving you a clear view of where things stand. Some agreements might include a final payment at the end—just to wrap things up neatly.
Operating Lease
Operating leases are a great fit if you only need equipment for a short while. You get to use what you need, when you need it, while the lender looks after ownership and handles the maintenance side of things. When your lease period wraps up, simply return the equipment—no long-term commitment required, giving your business the flexibility to adapt as you grow.
Financial Lease
A finance lease lets you use the equipment you need for an agreed period, making regular payments along the way. When your lease is up, you’ll often have the choice to buy the equipment outright—giving you the flexibility to decide what works best for your business as things evolve.
How do I secure funding for equipment finance?
If you don’t have the cash on hand for new equipment, a business loan tailored to your needs could be just the solution. It’s important to make sure your loan matches the life of the equipment, so your payments feel manageable and you’re not locked into a long-term plan for something you’ll only use for a short while. This way, you can keep your cashflow healthy while still giving your business room to grow.
But do I really need equipment finance?
Before you jump into any finance arrangement, it’s important to review your cash flow and plan ahead for different scenarios. This will help you find the finance option that truly fits your needs and show if an extra business loan might be worth considering. When your equipment finance is set up the right way, your business is in a great position to grab new opportunities, navigate ups and downs, and keep growing steadily. With a bit of planning and the right advice, equipment finance can be a practical and empowering part of your long-term strategy.
For more tips on business financing, contact us today!