Business equipment loan rates are integral to many aspects of asset finance and to the outcomes for operators. Interest rates on equipment loans affect the overall cost of the finance. Higher rates can result in an overall higher acquisition cost which can affect ROI. Equipment financing rates are critical to monthly payments which can in turn impact or support cash flow. Getting the most competitive rates can be significant in achieving productivity and profitability.
As experts in commercial financing, working with customers across multiple industry sectors, we are fully aware of the need for low rate equipment loans to ease cost pressures for business operators. We provide specialist services in securing the most competitive rates to support operators to achieve their objectives, both with their equipment acquisition and with their business.
Interest rates for equipment loans can vary across the lender market, across industry sectors, with different funding facilities and for different operators. To find out what rate we can secure for your equipment funding, contact us by phone or submit an online quote request.
Understanding how rates work and knowing how to secure the best rates can be essential information for astute business operators. While some of the computations are complex, the basics are relatively straightforward.
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The interest rate is the cost of borrowing funds, expressed as a per annum, per year, percentage. It reflects the risk assessment or creditworthiness of the applicant as viewed by the lender. The rate determines the total interest payable on a loan and as such, the total investment cost of the asset.
The rate along with the term of the loan and the amount borrowed, determines the monthly repayment. Securing the lowest rate achievable, can reduce the total investment outlay and the monthly commitments.
In the commercial lending market, lenders set their own rates based on their own individual guidelines and their own costs of acquiring funds. These guidelines include their preparedness to lend to certain profiles, to certain industries, and to some extent, on certain individual items of equipment.
Equipment loan interest rates can vary significantly across the market due to numerous factors, including the specific financing option and the borrower’s risk profile.
Carrying out an equipment finance rates comparison can be time-consuming and confusing when operators undertake the task themselves. We support operators by quickly sourcing the best rates to suit their industry, credit profile, funding facility and machinery from across our 80+ lender panel.
Securing the most competitive rates to reduce costs and support productivity and profitability growth. For an interest rate quote for your equipment financing, contact us.
Equipment financing rates differ with the types of funding facilities available, with lenders, and with the lender creditworthiness assessment of the borrower.
Our guides offer quick comparisons and simple explainers to help you navigate through the financing process with confidence.
Lenders determine their rates across their lending markets based on their assessment of the domestic and global economic forecasts, their own funding costs and with changes to the cash rate as set by the Reserve Bank of Australia.
The cash rate is the official overnight borrowing rate for banks and is an integral foundation from which lenders establish their own rates. When the RBA cuts rates, lenders across most markets tend to cut their own rates. When the RBA lifts the cash rate, lending rates tend to increase.
Economic conditions and forecasts can impact the rates that lenders set for different industries. This variation can reflect lender confidence in a certain sector, based on forecasts for that industry.
While market trends and economic conditions impact rates in general terms, the aspect more significant to individual operators requiring finance is their credit rating. Lenders assess the creditworthiness of borrowers based on their credit history and their current financial position. The better the credit rating, the lower the rate offered. Maintaining a good credit history with creditors, suppliers and loan repayments, can be extremely important when it’s time to apply for equipment finance.
Business equipment loan rates differ with the range of equipment financing options across the market. Chattel Mortgage and Commercial Hire Purchase attract the same rate which is the lowest of the selection. Leasing attracts a slightly higher rate and Rent-to-Own the highest interest rate.
New and used equipment financing can attract different rates. Unless specifically noted, lenders will display their best rate for new assets and for businesses with a good credit rating.
Within the lending sector, variations exist based on a lender’s interest in lending to a certain industry. Non-bank lenders that specialise in certain industries and have greater, in-depth knowledge of their specialist industry, can be known to offer more competitive rates than a general commercial lender.
With so many possible variations and with many non-bank lenders not providing services directly to business customers but only through brokers, using our specialist broker services can be the solution for securing the best rates.
Save time, save confusion and save on equipment finance interest rates by simply contacting Jade to handle your equipment loan.
With our accreditation with more than 80 lenders and our experience and expertise, we have the resources and the capabilities to assist operators secure the most competitive interest rates for equipment loans. Our brokers individually source and negotiate rates for each customer. Matching the customer’s profile with the lender best suited to offer the best rates.
Our services are available, without a referral, to all types of business operations – SMEs, sole traders, large enterprises, new operators, self-employed and family enterprises. Rates may vary for individual operators, but our service is consistent – personalised, individual and focussed on securing the best rates and most workable financing solutions.
For expert support in securing the most competitive rate for your equipment finance, call or connect with us online.
When planning equipment loans, one of the first actions by operators can be to start comparing interest rates from different banks, finance companies and other commercial lenders. Making decisions based purely on the different rates can be missing some other key elements of the overall financing package.
Unlike consumer credit where lenders are required to display a Comparison Rate which reflects some fees and charges, this is not required by lenders in the commercial lending market. Fees and charges applied by commercial lenders are usually not known until a specific quote is received. Comparing monthly repayments based on quotes, may be more indicative as the fees would be incorporated into those repayments, unless otherwise noted.
When comparing rates, consider taking a broader view and comparing all features of the finance product offered by that lender. Consider the minimum and maximum loan amounts to ensure they meet requirements. Consider the loan terms offered. The term along with the rate determines the total interest payable on the loan.
Take note of fees and charges. Loan establishment fees are charged by most lenders. But look for any other charges such as ongoing monthly account fees. These can add up over a 7 year loan term. Also ask about exit fees or any charges which are incurred to finalise the finance at the end of the term.
Most importantly, clarify if the rate offered suits your profile and the equipment you are purchasing. The rate you are offered may differ from the advertised rate.
To compare repayment estimates based on different rates, use our Equipment Loan Calculator. To easily compare rates and be confident that the most competitive rate has been secured, simply call Jade.
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THE INTEREST RATE IS CALCULATED ON A SECURED LOAN PREDOMINATELY FOR BUSINESS USE, EFFECTIVE 16/09/2024 AND SUBJECT TO CHANGE. WARNING: THE INTEREST RATE IS TRUE ONLY FOR THE EXAMPLES GIVEN AND MAY NOT INCLUDE ALL FEES AND CHARGES. DIFFERENT TERMS, FEES OR OTHER LOAN AMOUNTS MAY RESULT IN A DIFFERENT INTEREST RATE.
Lenders assess finance applications individually for creditworthiness. The interest rate offered to businesses can differ based on credit profile and financials rather than the type of operation or set-up.
Chattel Mortgage and Commercial Hire Purchase offer the lowest rates. Leasing rates are slightly higher. Rent-to-Own has the highest rate of commercial funding facilities.
Lenders set their own rates based on their costs for funding, confidence in the sector, the RBA cash rate and economic trends and forecasts. Lenders have their own guidelines for setting rates and this results in variations across the market.
Yes. Credit checks are an integral part of the finance application process and can affect the interest rate offered.
Using a loan calculator allows operators to convert interest rates into repayment estimates. The results obtained with these online devices are estimates only.
There can be variations in the interest rates on finance offered for operators in different industry sectors. This reflects lender willingness to lend to that sector and may reflect their confidence in the sector based on economic forecasts.
Lenders typically advertise their best rates. These best rates will be for new equipment assets and for operators with good credit ratings. Where an applicant has a less than good rating, a higher rate may be offered. Higher rates may apply to used compared with new equipment.
Equipment finance facilities are typically arranged with a fixed interest rate. The rate does not change over the loan term.
Yes. Interest on asset acquisition finance is a tax deductible business expense on all funding facilities.
The interest rate along with the loan amount and term are used to determine the monthly repayment, as well as lender fees and charges. Higher rates lead to higher repayments, lower rates deliver lower monthly repayments.
