How do I get a plant & operation loan for my business? Plant & Operation loans can be for a diverse range of machinery and tools such as conveyors, forklifts, vehicles, cranes etc. The requirements for approval vary depending on the lender chosen. However, there are usually some common criteria such as:
- business has been operating for 2 or more years
- operational equipment is purchased from a recognised dealer
- proprietor has ownership in a property asset
STEP 1: find a finance broker or lender who specialises in plant & operation finance.
STEP 2: Sign, date and fully understand the Privacy & Consent Form before any dealings with your chosen finance broker or bank.
Before any dealings with a lender or finance broker, a Privacy & Consent form must be signed and dated. This is a requirement by law which should state that any information you provide your broker or banker verbally or in writing is private and confidential and used for the sole purpose of which it is intended unless required by law. Often authorisation is given in this document to request financial information from professional associates such as an accountant or lawyer, to streamline the process.
STEP 3: Application (supporting documents)
There are 2 types of applications for a Plant & Operation – what is commonly referred to as a Low Doc Loan applications or Full Doc Loan application.
Basically, the difference is –
Low Doc Applications
A low documentation commonly referred to as low doc is a fast track loan application process. It allows the applicant to provide minimum financial supporting documentation based on pre-qualification questions that determines the risk associated with the transaction.
The following are the usual Low Doc application requirements:
- Current Driver’s Licence
- ABN registered for GST for 24 months or more
- Tax Invoice from recognised dealer
- Privacy and Consent Form
- Rates Notice
- Statement of Assets and Liabilities
Full Doc Applications
A full plant and operational equipment loan application will involve the lender conducting a full debt servicing analysis. This analysis when conducted accurately and correctly should determine that the business has the ability to service the new proposed debt. The lender will consider existing debt obligations along with general living expenses and offset income on a monthly annual basis to determine if the new debt is sustainable and the business can run at a surplus not a deficit.
The following are the usual Full Doc application requirements:
- Most recent Financial Statements
- Most recent Quarterly Business Activity Statement
- 30 days Bank Statements from trading account
Quick qualification and approvals can usually be sourced by a good finance broker. Specialist Finance Brokers Will Finance, says that having access to multiple lenders has enabled them to source the best deals and rates for many of their customers. Each business has unique requirements and having multiple lenders has allowed them to provide the finance to assist customers with growth and success.
STEP 4: Settlement
Once the loan has been approved, it is then the finance brokers responsibility to arrange the date for settlement and ensure the loan contract documents are executed correctly. Usually the loan documents consist of the following:
- Financial Institution’s Privacy & Consent Form
- Direct Debit authorisation
- Loan Contract.
In some instances, settlement will have approval conditions and request extra documentation before funds are transferred.
Finance Brokers, Will Finance, have the experience to execute accurate settlement documents resulting in a time effective service.