Writing this marks a return to Arbor Age for me, after many years in a long finance-broking career.
In the mid 1990s I met a young Kurt Quambusch, who had recently begun Arbor Age magazine and was intent upon establishing it as a reliable and useful source of information for the arbor industry. We were introduced by a large tree equipment supplier in Melbourne, and I subsequently wrote a series of finance-related articles. From those articles, over time, I made longstanding relationships with a long list of tree businesses, many of which continue today. When I was given the opportunity to write some articles again, I jumped at the chance.
These days Back In the 1990s our job as brokers was to gather up a list of information for a finance application. Name and contact details, verifiable credit references, trade references (which were obtained by bank staff, by telephone), profit and loss statements and tax returns were the norm. Waiting for tax returns and financials often held up applications for long periods, and once the information was collected we would type up an application, giving reasons for it (such as a business case for the machine), why we thought it should be approved, then send it off on a fax to a lender and wait for an answer.
Things have changed!
Most of that information is now obsolete and an application is now usually only the identification details of the applicant, needed to comply with Anti Money Laundering laws. Financiers (of which there are so many more) have their own web-based portals to log into, and are interested mainly in the details of the machine or vehicle to be purchased. Automated credit decisioning is made by the lender’s back office following an instant trawl of the variety of business bureaus that collect up vast troves of information. Voila, no people involvement!
Choose wisely
Most, if not all, lenders have a particular ‘patch’ they service – new cars, utes and trucks are the domain of the best rates, usually approved in double-quick time. The best rates for industrial machinery may be procured elsewhere. Some lenders follow a niche in new equipment, others again for used and private sales. Knowing who to approach and how has become a specialised function for equipment finance brokers and their input can save a lot of time and money. Using a broker gives access and an open door to the many and varied credit policies of the variety of equipment and vehicle finance providers.
Of course any broker will be delighted to hear from you if you’re considering finance for your business. It’s part of the reason we’re here. But it’s crucial to choose carefully. Finance can be quick and easy, but the longer-term consequences of accepting whatever is available can be expensive. Most important is to deal with a reputable financier or intermediary, ask about their experience and range of products, ask about the finance product you are being offered, get a quote, and then get another if you need to. The Commercial and Asset Finance Brokers’ Association (CAFBA) is the industry body which specialises in equipment and vehicle finance, its members are experienced and knowledgeable and are a very good starting point.
Opportunities
Here’s a few thoughts for right now:
* With only a short time until the end of the financial year, consider that the Instant Asset Write Off will end on June 30. Any item of income-producing business equipment can be written off immediately as a full deduction up until June 30, after which the previous depreciation regime will return;
* Interest rates are still rising, although they remain at modest levels. They are almost always fixed for vehicles and equipment, so can be locked in to guard against future increases;
* Australiawide Finance caters to all business finance, but also arranges finance for personal use: cars, boats, motorbikes and caravans. We have some great rates!
