Green equipment finance is loans for alternate fuel equipment, machinery, systems, technology and the infrastructure to support energy efficient assets. With fuel and energy costs a major expense for many businesses, access to affordable loans to invest in these types of assets may represent a workable solution to reduce operating expenses.
With the ongoing conflict in the Middle East causing diesel and petrol prices to soar, operators across many industries will be considering their options, looking at different ways to reduce their current diesel costs and future-proof the business against possible risks.
According to reports, there has been increased interest from the business sector in machines and equipment powered by solar and battery. Exactly the types of assets that may be funded with what has been coined, green equipment finance.
For any asset investment to be viable, the funding must be cost-effective. We support businesses to acquire the assets needed to reduce fuel and energy costs and target other core costs with affordable finance.
What is Green Equipment Finance?
Green Equipment Finance is not a new asset acquisition credit facility. It is an emerging term for business finance for ‘green’ equipment and other assets. Essentially the same credit facilities, rates and loan features apply. The exception being where opportunities are available through some channels to provide specific rates for investing in low emission assets.
Our brokers are across the business lending market and are alert to when opportunities are available for special rates or loan conditions for specific acquisitions.
Types of Green Equipment Finance
Energy efficient assets are financed with Chattel Mortgage, Rent-to-Own, Leasing or Commercial Hire Purchase. The business decides which credit facility best suits their approach to tax, balance sheet and method of accounting.
Interest rates are fixed and are offered based on the lender’s assessment of the business financials and credit score. Terms and monthly repayments are fixed. Balloons and residuals apply and the tax deductions applicable to each credit facility are realised.
Low Docs Green Equipment Finance
Astute new operators setting up a new business may be noting the current scenario and decide to establish their business with all energy efficient machinery and systems. But without financial documentation, sourcing funding can be a challenge. New and start-ups can benefit from our accreditation with specialist non-bank lenders that offer No Doc and Low Doc Equipment Finance.
What can be funded with Green Equipment Finance?
In general terms, all machinery, equipment, systems and technology defined as energy efficient, low emission and alternative power, may be financed with asset loans. The specific units will depend on the individual business and the industry sector. For example, operators may consider battery-operated cranes and heavy machinery, converting factories and production lines to run on solar power, operating battery electric vehicles.
Assets may include the machine units, or systems, technology and the infrastructure to support the units. Charging infrastructure for EVs is a popular investment as the take-up of low emission vehicles surges in Australia.
Operators may need to contact manufacturers to see what units are available to suit their particular production processes and operation. When possibilities are sourced, use our Asset Finance Calculator for quick finance estimates, to convert acquisition prices to payments, and to compare different makes and models.
Loan Options for Ancillary Services and Costs
Businesses may face additional costs with the acquisition of renewable energy equipment. These costs may include installation and commissioning of the machines and systems, consultant fees to advise on the most appropriate way forward, and costs to train staff to both operate and maintain the equipment.
These costs are not generally included with the purchase of machinery. As services rather than assets, these costs can be financed with Unsecured Business Loans or a Business Overdraft. While rates are higher on unsecured compared with secured loans, we can source very affordable solutions.
Loans to Target Specific High-Cost Centres
Addressing energy and fuel costs may be just one high-cost centre in a business. Operators may find other areas of the business that putting pressure on cash flow and profit margins. As specialists in financing for business, our brokers can advise specialist business loans to target these pain points.
For example, large insurance premiums due as a lump sum annually, may be funded with Insurance Premium Funding. On the other side of the ledger, if slow payment of invoices is holding the business back, speak with us about Debtor Invoice Funding.
For cost-effective green equipment finance to reduce fuel costs and make your business more energy efficient, connect with Business.Finance brokers 1300 000 033.
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS
