FINANCE SOLUTIONS FOR SME CLIENTS

Business Equipment Purchase Loans

Why use PMA to finance your client’s business equipment purchase:

  • They need a short-term loan to purchase equipment for their business
  • They urgently need to purchase equipment and can’t wait for bank approval
  • They can’t provide financials to show they can service a regular bank loan

Business Equipment Purchase Loan Terms


Loan Amount

Up to $5M (1st Mortgages) & $2M (2nd Mortgages)

LVR

Up to 75% of the ‘as is’ value (max. LVR of 75% for major metro residential property, other security at lower LVRs)

Security

1st or 2nd Mortgage

Term

3-12 months + Extensions

Business Equipment Purchase Loans



Many businesses don’t have enough available cash to consider an outright purchase, making business equipment financing a necessity. Even if they can afford it, investing cash in assets may leave them with less working capital to finance operations or explore new growth opportunities. Using property as security for a short term loan to finance business equipment purchases can be a quick and cost effective way especially if it’s important for the business to own the asset from the outset. A loan to purchase business equipment from a private lender can be a good option for many reasons. First off, banks and traditional lenders usually have very strict lending criteria which means some businesses won’t be able to get a loan. If a business has credit issues or can’t show that they’ll be able to service the loan then the bank will likely say ‘no’, whereas a private lender has a lot more flexibility in who they will lend to. A private lender is more concerned with how the business plans to pay back the loan at the end of the term. This is called the ‘exit strategy’. If the business has a property with equity to secure the loan and a strong exit strategy then a private lender will usually consider approving the loan application. For example, a business might be looking to purchase equipment to allow them to fulfil a large customer order they have received. The exit strategy would be to use the proceeds from the order to pay back the loan. In this instance a short-term loan to purchase the equipment would allow them to take advantage of a great business opportunity.

CASE STUDY: Equipment Purchase

This borrower required finance for equipment purchase for a new bakery and to provide working capital.

The Borrowers had a background in managing a bakery and were planning to open and operate a new bakery.

The purpose of this loan was to purchase an oven and other equipment for the new bakery as well as working capital to get the bakery up and running.

The Borrower couldn’t get bank finance as they don’t have financials to support the banks’ servicing requirements as this is a start up business.

Security on offer is the Borrower’s principal place of residence in Trinity Beach, a coastal suburb of Cairns in Queensland. The property is an apartment with two bedrooms, one bathroom and one car space with a common swimming pool.

The exit strategy was to operate the bakery for two years, prepare financials and then refinance out to a
mainstream bank.

Details 

  • Security Property Valuation: $170,000
  • Loan Amount: $100,000 (First Mortgage)
  • LVR: 58.82%
  • Interest Rate: 8.95% p.a.
  • Term: 21 months prepaid plus 4 monthly extensions

Equipment purchase loan for small business

Ready to discover how PMA can help provide finance solutions for your business (or your client's business)? Submit a scenario now and we'll get in touch (4-business hours response time guaranteed!)

Submit a Scenario

Lending Process


application

Complete our
Quick App Form


or

Book a Call
with our head of relationships

indicative

After receiving the Application we’ll develop an Indicative Letter of Offer which includes an indicative interest rate.

Once the Offer is accepted a small assessment fee is charged to cover the searches we do in due diligence.

letter

Once we’ve completed our due diligence, we’ll send a formal Letter of Offer. Once signed the loan documents are drawn up and sent to the Borrower’s solicitor.

letter
congrats

Upon return of the fully executed documents the approval fee, legal costs and prepaid interest are deducted from the loan and the balance is paid to the Borrower.

Referrer fees are paid within 24 hours from settlement with no clawbacks.

We endeavor to make this process as quick as possible and can settle within 5 days upon receipt of all outstanding information.

Our Other Private Lending Solutions