Why Financing Equipment Is the Most Commercially Viable Solution for SMEs


Amongst the many barriers to growth that SMEs face, asset funding is one of the most common amongst all industries. Without guidance, SMEs may succumb to the lengthy application process, identification hurdles, and subsequent rejection from big banks leaving them in despair over their business aspirations. The good news is that this isn’t the end of the line for SMEs to keep pace with their equipment requirements nor is it even close. 

Asset finance from boutique lenders such as Grow Finance is a tailored solution to accessing vital equipment as it’s fast, cost-effective, and highly accessible for all business types. Also known as Hire Purchase Finance, asset finance allows the borrower to share the cost of the desired equipment with the lender in which the latter owns the asset outright and shoulders the cost of obsolescence, asset disposal, in turn, freeing up cash flow for the former. Not only do Grow Finance offers a tax reduction on this financing type (double-check this with your accountant), but Asset Finance will allow you to service more customers, expand your asset base to operate the business with evolving standards and increase your cash flow to the point where equipment ownership is viable.

To be commercially viable is to respond to new market trends with speed and diligence. When SMEs are faced with approval delays by the traditional gatekeepers, premium non-bank lenders such as Grow Finance exist to remedy the strict lending criteria upheld by banks that can be the difference between the opportunity taken and the opportunity missed. A recent Australian article cites the dramatic spike of equipment financing which has “risen by 5 percent in retail and 11.6 percent in agriculture”. This comes as a direct result of Australia recording its biggest six-month growth in history with “GDP in the December quarter beating expectations to lift by 3.1 percent” and highlights the importance of a non-bank lender’s rapid response rate to help SMEs satisfy the demand of the market instead of keeping them waiting. Moreover, this optimistic outlook on the Australian market should be the harbinger of opportunity for SMEs to upgrade their existing technology, comply with environmental standards and venture into the post-pandemic economy leaner and more competitive.  

Citing the Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) in the UK, the growing optimism among equipment finance executives is reflective of the spike in demand for equipment in the markets they lend to. The growing need for accessible and low-fuss asset finance is global and as it’s demand across all sectors is set to increase, it should give SMEs confidence in it being a trusted, household solution to growing their business. The MCI-EFI report details a survey in which the optimism is reiterated with “23.1% of respondents expect more access to capital to fund equipment acquisitions, up from 18.5% in January” underlining the increase in optimism is in tandem with the market demand and such a spike will require an equally fast asset finance solution for SMEs to grow.   

As the Australian economy has shown how quickly it can recover, tailored Asset Financing from Grow Finance will help keep the momentum of your business flowing and allow you to grab opportunities with both hands as the demand picks up. The Grow Finance repayments calculators is the best place to start your equipment finance planning. 

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