A question about the cost of machinery...

[Cowcorn]

The twelve joyful mysteries are actually getting the finance !!! The twelve sorrowful ones are having to pay it back !!!!!

 

[thesilentone]

So, I think you may have guessed, very few have a replacement plan, and pretty well shoot from the hip. There are many motivators for replacing kit, the old one is knxxxkerd, an immediate need, the finance is coming to an end on the existing kit or the neighbour has got a new one

Looking at capital assets, how it effects the balance sheet, turnover and tax position is not No1 priority.

Many only buy when they can afford it and waste good capital, many find out the monthly cost and if they can afford it. Some just take a flyer and hope...................

Checking out the tax benefits of allowances on repairs v replacement is becoming more common, however belts are being tightened (again)

 

[Johnnyboxer]

Out of interest, do you provide finance for only brand new gear or do you also provide finance for used gear?

For the same borrower, then what are your headline differentiated terms max asset age, caps on principal, differences on rates of interest etc.

Not for me per se - but if you could answer in the public domain that would be appreciated. Thanks.

Used gear is also financed, just depends on what it is, how old and how long you want to keep it
Best to use/find a good local Broker and have a meaningful discussion with them and build a relationship going forward
Same as a Vet/Agronomist/Feed Co/Machinery Dealer/Insurance Agent/Farm stores................a Finance Broker should be part of your farm business toolkit

 

[Borlace1]

Thanks for the question. We can assist with finance on both used and new kit, in terms of asset, the term proposed can change, for example a brand new tractor or combine can be looked at over 7 years, the age of the asset at the end of the agreement needs to be considered (max ideally 10 years on expiry). In terms of the interest rate, this will depend on the type of asset. We can finance dairy cows, this is normally looked at (max term) between 42 and 84 months and the cows can't be older than 7 years at the end of the term.

The strength of the business who is borrowing the money is important, clearly we need to demonstrate that the business has available funds to make repayments and the value of the business seen in the balance sheet is positive. In terms of rate, a flat rate of 2% is achievable but not all types of assets/businesses.

I do like to understand the plans for a business over the next 12 months and can assist by putting a funding line in place, where a business has a couple of purchases to make and wants peace of mind to know funds are available when required.

I hope this helps!

 

[thesilentone]

Thanks for the question. We can assist with finance on both used and new kit, in terms of asset, the term proposed can change, for example a brand new tractor or combine can be looked at over 7 years, the age of the asset at the end of the agreement needs to be considered (max ideally 10 years on expiry). In terms of the interest rate, this will depend on the type of asset. We can finance dairy cows, this is normally looked at (max term) between 42 and 84 months and the cows can't be older than 7 years at the end of the term.

The strength of the business who is borrowing the money is important, clearly we need to demonstrate that the business has available funds to make repayments and the value of the business seen in the balance sheet is positive. In terms of rate, a flat rate of 2% is achievable but not all types of assets/businesses.

I do like to understand the plans for a business over the next 12 months and can assist by putting a funding line in place, where a business has a couple of purchases to make and wants peace of mind to know funds are available when required.

I hope this helps!

Asset funding for equipment has never really changed for decades, the heady days of 100% capital allowances saw leasing take the market by storm, followed by creative schemes to stimulate business (deferred payments, balloon payments, etc, etc). However given the long-period of low interest, other than providing for medium risk customers, what added value do finance companies bring to table today, that cannot be offered by the Banks ?

 

[Borlace1]

Out of interest, do you provide finance for only brand new gear or do you also provide finance for used gear?

For the same borrower, then what are your headline differentiated terms max asset age, caps on principal, differences on rates of interest etc.

Not for me per se - but if you could answer in the public domain that would be appreciated. Thanks.

Thanks for the question. We can assist with finance on both used and new kit, in terms of asset, the term proposed can change, for example a brand new tractor or combine can be looked at over 7 years, the age of the asset at the end of the agreement needs to be considered (max ideally 10 years on expiry).

In terms of the interest rate, this will depend on the type of asset. We can finance dairy cows, this is normally looked at (max term) between 42 and 84 months and the cows can't be older than 7 years at the end of the term.

The strength of the business who is borrowing the money is important, clearly we need to demonstrate that the business has available funds to make repayments and the value of the business seen in the balance sheet is positive. In terms of rate, a flat rate of 2% is achievable but not all types of assets/businesses.

I do like to understand the plans for a business over the next 12 months and can assist by putting a funding line in place, where a business has a couple of purchases to make and wants peace of mind to know funds are available when required.

I hope this helps!

 

[Johnnyboxer]

Looks like an advert [emoji43]

 

[Pheasant Surprise]

Looks like an advert [emoji43]

The whole thread is an advert

 

[Johnnyboxer]

So it seems..... in an editorial type way

 

[thesilentone]

A Pound is a Pound, it really does not matter who's it is, you can dress it up anyway your company plan requires, but it is still a Pound. If it is borrowed the simple criteria for any borrower is how much does it cost me to repay it.

Financial returns on loaned capital are no longer on the interest alone, we now have very transparent, but high costs associated. Unless Finance Companies can add value to the borrower, why go past the Bank ?

Sound financial advice prior to any significant borrowing for equipment or any other is required, so all the advantages to the business and balance sheet can be exploited.