Consider all the options when buying new equipment

If you're buying new business equipment, there are a number of ways to finance your purchases. NAB Agribusiness General Manager Khan Horne explains the type of business lending options available.

What's available for business equipment financing

The agriculture industry has changed a great deal in recent years. New technologies are helping boost productivity and reduce labour costs – and many business owners may be considering opportunities for growth. That might mean investing in new production facilities or buildings, buying a vehicle for your small business, or purchasing business-specific tools or business machinery to improve efficiency.

When it comes to investing in equipment, there’s a lot to consider. Should you buy new or second hand? Which brands are best? What about re-sale? Perhaps the most important question to ask yourself is, what's the most cost-effective way to fund your purchases – working capital, a vehicle or equipment loan, or another type of financing arrangement?

Should you buy with existing capital – or explore business finance?

Seasonal cash flow fluctuations can make vehicle and equipment purchasing decisions especially difficult (the NAB cash flow template is very helpful), but there are a number of ways you can finance business purchases. While some business owners opt to dip into their working capital to buy what they need, others find business vehicle and equipment financing a better alternative.

NAB Agribusiness General Manager Khan Horne says the bank is seeing a lot of interest from customers looking to upgrade at least some of their equipment, and he urges them to carefully consider all the business loans and finance options available.

“Remember there is more than one way to finance new equipment, and outright purchase is not always the best way to use the capital you have. Generally, it is good business practice to have a balanced mix of debt and equity.”