Equipment Financiers keep up with demand using No-Financials lending

The lower running costs of stream-lined assessment helps lenders remain fast & competitive in a market that demands it

Australian lenders providing asset finance using products such as chattel mortgage, hire purchase and lease, are increasingly turning to stream-lined applications to keep up with demand and remain competitive.

Equipment Finance Brokers play a large role in the Australian Banking & Finance Industry by being the customer face to face conduit between business customers and equipment financiers.

On behalf of their customers the brokers ask the financiers to compete on the following 3 main factors:-

  • Price
  • Application Ease
  • Speed of Approval

Providing stream-lined finance procedures like the no-financials application, helps the lenders to compete on all of those 3 factors.

The simplified process for assessing no-financials applications, helps reduce the lender resources required for skilled staff to assess finance applications. This not only means less cost to help the financiers remain price competitive, but also faster application turn around.

In a fast paced business environment, for small business owners the reduced information required and the speed of approval provided by a no-financial loan application, are features that have become very popular.

The financiers have varying policies in place where under certain conditions they choose to forgo the normal information requirements of a full application which would require a full financial assessment.

These policy conditions may find a customer being asked some of the following questions to assess whether an applicant qualifies for a stream-lined application process:-

  • Is the business equipment New or Used?
  • If the equipment is used, how old is it?
  • Is the equipment being purchased from a dealer or from a private supplier?
  • What type of equipment is it?
  • What amount of finance is required?
  • How long has the business been operating?
  • Does the business or business owners have some equity in real estate?

Depending on the combined answers, a financier may not require any financial information or may only require a reduced amount of information for an application.

For example, a financier may be happy to provide a stream-lined assessment for a Used machine of a particular type, if it’s being purchased from a dealer, and it’s of a minimum age of 4 years, as long as the financed required is no more than $150,000 and the business has been operating a minimum of 3 years and the business owners have some equity in real estate. Another financier with the same scenario presented may be happy to finance the machine if it is being purchased from a private supplier, the machine can be as old as 10 years at finance term end, but the financier will only lend up to a maximum of $100,000.

As mentioned, each lender has different policies and these policies can often change and even come and go.

A customer benefits from Equipment Finance Brokers being well placed to keep abreast of these changing lender requirements, with a broker helping to guide them to solution that best fit their application scenario.

If you'd like more information about no-financials equipment finance or would like to make an enquiry to see whether your application scenario qualifies for a stream-lined assessment, you can contact us here.

Choice doesn’t have to come at a cost

Many equipment finance brokers don’t charge the customer a fee for their service, rather the lender pays the broker for work that the lender themselves would have otherwise had to bear the cost of.
See here for more information about how an equipment finance broker is paid.

For your next business equipment purchase, you may consider using the services of a business finance broker, well versed in equipment finance to do the leg work for you, providing you with not only choice and flexibility, but a no-fuss easier solution.

Disclaimer: The information in this article is not intended to, and should not be relied upon, to provide tax, legal, investment or accounting advice. You should consider whether the information is appropriate to your needs, and where appropriate, consult your own tax, legal, investment or accounting advice.

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