The Benefits Of Equipment Financing for Used Equipment
In this day and age, there’s nothing quite as important as saving money and caring for the environment. This is one of the main reasons why so many business owners are choosing not to invest their cash into newer equipment and accessories, in favour of purchasing goods that are in a used condition. Used equipment financing can offer a great solution to those hoping to save money, whilst doing their bit for the environment.
What Constitutes Used Equipment?
Whether it’s a vehicle, an office desk, or gym equipment – if an item could be deemed used or second hand in nature, then it will constitute as used equipment. Although many people consider these types of accessories to be inferior in quality when compared to new ones; the reality is that most suppliers will quality control any goods that they provide.
Which Types of Items Can Be Purchased Under These Financial Agreements?
Equipment loans can be used to purchase used equipment that will be no more than 8 years old at the end of the term. Therefore, if the term of your loan is 5 years, the equipment cannot be any older than 3 years. Equipment that is still deemed to be functional may be purchased under one of these types of agreements. Some solutions are more popular than others, for example the purchase of vehicles (specifically plant and industrial grade).
Rather than contributing to supply and demand, where fresh supplies are manufactured by distributors, a business owner could instead reduce their own global footprint by reducing their need to invest in brand new products.
There are options to take out financing for a used tractor for construction, demolition and agricultural purposes, as well as general used heavy equipment financing solutions that can be used to cater to any form of machinery. There are even instances where used construction-mining equipment financing can come into play, in fact many of prospecting companies rely on these features to be able to cover the costs of their tools and resources every year.
What Are The Benefits Exactly?
There are two main advantages to taking out a loan to cover the cost of used equipment – particularly the types that will be used for professional purposes. As mentioned above, the first relates to the cost of the equipment itself. In the majority (if not all) instances second hand property and assets can be far cheaper to buy when in a used, but functional, condition.
Consider a tractor for example – a vehicle that can often carry a cost worth tens of thousands of dollars in Australia. When buying second hand, these vehicles can often be bought at a fraction of the cost when compared to brand new. In exchange for a few bumps and scratches, a business owner could still save themselves a large amount of money – and as a result, reduce the amount that they have to borrow from a lender.
This isn’t the only advantage however, in fact the other one can be far more appealing to those that are environmentally-minded. It relates to the ability to reduce the effect of production on the environment. For example, if a business owner was to purchase a new tractor, then they would also be paying for the production of that vehicle; from the steel used, right through to the type of fuel consumed.
If they ordered a tractor to be created for them, then this production cost would climb even higher – not to mention that it too would take its toll on the environment. By finding a used tractor to purchase as an alternative, the need for a made-to-order equivalent would be nullified, allowing a lesser impact on the environment.
When combined – the potential to save money on used equipment, whilst benefitting the planet, can be more than enough reason for a modern business to consider taking this route. The extra cash saved could always be put on something else to do with the development of the business, or even saved for another financial obligation. Less money borrowed means less to repay – and the quicker that a finance loan can be paid off, the lower the amount of interest that will need to be covered.