“Are you kidding?” says Ray Graetz, founder of Coastal Transport Services, when asked if he’s ever taken out equipment finance. Along with the traditional blood, sweat and tears, his Smart50 award-winning business was built on it.
A business built on finance
Every business has certain tools of the trade that underpin its operations, and in construction and transport, reliable motor vehicles and equipment are essential for maximising productivity and efficiency, minimising downtime and repair costs, and delivering the best possible service to customers.
Of course, finding the cashflow to purchase any sort of professional equipment can be difficult – which is why for the 30-odd years Coastal Transport Services has been in business, Graetz has been using equipment finance to help him upgrade and expand his fleet of heavy-duty vehicles.
“If you’ve got to buy a few trucks or trailers, and we’re replacing them all the time, it’s huge money – we’re talking about one trailer and one prime mover costing $375,000 or something like that, depending on what sort of equipment you’re buying, so you don’t have much choice but to finance it,” he says.
In fact, equipment finance is ideal for funding these sorts of purchases, according to Joe Formichella, National Head of Small Business at Bendigo Bank, because you can borrow against that asset itself – rather than putting your house up for security, for example. Plus, the interest is fixed for the life of the loan, which can be up to five years, and there are flexible repayment options.
A special rate to support small business
Periodically reinvesting in your business operations is important if you want it to not just survive, but thrive and grow – however, many Australian small businesses owners are lacking confidence and/or struggling to access the capital they need to do it, the Xero State of Lending Report found.
As it stands, 67 percent will primarily depend on their business profits to fund growth, while nearly one-fifth (19%) will turn to their personal savings, potentially restricting their ability to expand and update their services as necessary, and limiting their flexibility to capitalise on short-term opportunities, such as EOFY sales events.
“For tradespeople to grow their business and solve that equation of delivering quality outcomes at a competitive price, they really do need reliability in their equipment, so it makes sense to keep things in good repair and change them over on a regular basis – because any downtime costs them money,” Formichella says.
“With June 30 approaching, there are a lot of suppliers having EOFY specials for vehicles and equipment, so this time of year is always a good opportunity to review your business needs and take advantage of some pretty sharp pricing.”
To support small business customers at this time, he adds, Bendigo Bank has made available an EOFY special equipment finance rate of 3.99% p.a. for any selected new assets that are acquired and paid for before 30 June – including all passenger vehicles, trucks, trailers, tractors and earth-moving equipment.
“We’ve certainly got a big focus on small business and we’re throwing a lot more resources and personalised support behind small business owners around Australia,” Formichella says. “This is just one of many initiatives we’ll have over the coming 12 months, so watch this space.”
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