Equipment finance applications are usually driven by the immediate need to obtain additional plant and equipment or machinery. While response times can be fast depending on the lenders workload, they are rarely immediate.
Traditionally, the pre-approval process has been associated with residential homebuyers. Pre-approvals can provide a level of comfort and confidence when purchases are searching for a new house, as a buyer will be clear about their financial position and how a lender will respond to a contract for purchase.
At Materials Handling Finance Pty Ltd (MHF), we provide fast and easy commercial pre-approvals. Here are the benefits you can get with commercial pre-approvals at MHF:
1. Bargaining Power
When negotiating with equipment suppliers, having a clear indication of your own financial position can aid in the bargaining process. Where a purchaser knows exactly what they have to spend and that the funds are readily available, the purchaser can negotiate terms that are more favourable to them including delivery dates, price and volume. Having a pre-approval in place puts you in the position of control.
2. Prospective Contracts
Often a business owner or company may be asked to quote or respond to a tender that falls outside of the current operating capabilities of the business.
Perhaps the business requires more machinery or equipment in order to fulfil the requirements of a prospective contract. Having a pre-approval in place provides the certainty and confidence that you as a business owner will be able to obtain the new equipment prior to submitting a quote or tender response.
3. Fast Turnarounds
An existing pre-approval expedites the turnaround of obtaining new equipment or machinery. Where businesses rely on the traditional process of obtaining finance; that is, recognizing the need, contacting a financier, preparing financials, applying and documentation and then waiting for a response, times can be considerable before the equipment is actually ordered and in place. This process needs to be undertaken for each equipment item required at different times.
With a pre-approval, a running approval balance is in place and business owners can then simply order and receive the equipment in an efficient manner. One of the great benefits is that the complete application process is completed just once for the pre-approval amount.
How does it work?
In simple terms, the commercial pre-approval facility operates by:
- An initial application for a pre-approval amount (ie. $500,000)
- Equipment is ordered against the pre-approval
- The pre-approval amount is reduced by the purchase amount
- The pre-approval operates on a revolving limit; as the loan is paid, the pre-approval amount increases again
Find out more
If you would like to find out more about commercial pre-approvals, please call us on 1300 884 145 or logon to www.mhf.com.au and lodge a quote request for us to get back to you. Alternatively, you can email or call our team directly:
Ian: firstname.lastname@example.org | 0407 818 887
Mal: email@example.com | 0401 647 526