Equipment Finance for NZ Businesses: When Does It Make Sense to Borrow?

For many New Zealand businesses, equipment isn't a luxury. It is essential to getting the job done.

From excavators and forklifts to manufacturing machinery, CNC equipment and IT systems, the right equipment can improve productivity, increase capacity and help businesses compete.

But purchasing equipment outright can require a significant amount of capital.

That's where equipment finance in New Zealand can provide an alternative.

What is equipment finance?

Equipment finance allows a business to acquire an asset while spreading the cost over an agreed finance term.

The structure can vary depending on the asset, lender and circumstances.

Whiting Financial Services offers finance solutions for plant and equipment, including options such as term purchase, finance lease and rental/operating lease.

When should you consider equipment finance?

You're preserving working capital

Buying expensive machinery outright can significantly reduce cash reserves.

Finance may allow you to retain capital for everyday operating expenses and future opportunities.

The equipment will generate additional revenue

If purchasing equipment allows your business to accept more work, increase production or reduce downtime, finance may help you acquire that asset sooner.

Your existing equipment is becoming unreliable

Old equipment can become expensive to maintain.

Breakdowns can lead to:

• Lost productivity

• Missed deadlines

• Repair expenses

• Customer dissatisfaction

Financing replacement equipment may make sense when the cost of keeping old machinery exceeds its business value.

You need to expand

Growth often requires investment before the additional revenue arrives.

Equipment finance can potentially help bridge that gap, provided the business can comfortably service the borrowing.

What equipment can be financed?

Depending on lender criteria, business equipment finance may cover assets such as:

• Excavators

• Loaders

• Forklifts

• Cranes

• CNC machinery

• Manufacturing equipment

• Engineering equipment

• IT equipment

• Commercial vehicles

WFS specialises in financing business assets and offers solutions across several equipment categories.

Match repayments to your business cash flow

One of the most important considerations is choosing a repayment structure that works with your business's income.

WFS states that equipment finance can be structured with repayment frequencies such as weekly, monthly, bi-annual or annual, depending on the circumstances.

Is equipment finance right for you?

Ask yourself:

• Will the equipment generate income?

• How long will it remain useful?

• What will happen if revenue falls?

• How much cash would an outright purchase consume?

• What finance structure is appropriate?

• What is the total cost of borrowing?

The answers can help determine whether finance makes sense.

Speak with an equipment finance specialist

The right equipment can help a business become more productive and competitive. The wrong finance structure can create unnecessary financial pressure.

Whiting Financial Services Limited can help businesses explore equipment and asset finance options across a range of industries.

If you're planning to purchase machinery or equipment, talk to WFS about your finance options before making the purchase.