A few weeks ago, our office was able to provide Excavator Finance for this brand new EC350D Volvo purchased through the Smeaton Grange branch of CJD Equipment.
We had an online finance enquiry from a client that had been working for wages in the Earthmoving Industry for 10 years, but was seeking finance approval to purchase their own machine.
So what information did we need from the client?
So what information did we need from the client?- Application for client to complete
- Copy of the sales contract from CJD Equipment
- Copy of the work contract was provided indicating that they would be a preferred contractor
The client emailed us all of the above information back in a timely manner which gave us the ability to provide a fast finance approval
What did we do in order to provide a formal approval?
This Excavator Finance deal had to be assessed under a new start policy as client had just formed a company and was about to become self-employed in the Earthmoving Industry. Finance deals relating to new start ventures are very difficult to get through and they need to be handled by a specialised Finance Company like Heavy Vehicle Finance, in order to achieve a successful result.
One of our Senior Finance Consultants had a good look over the work contract that stipulated the client would be a preferred contractor if they were to secure their own 35 tonne Excavator. Within this 40 plus page contract were pay conditions, pay rates and ongoing contractor obligations. From here, we referred the deal to a Senior Finance Analyst, who prepared a detailed cash flow forecast providing calculations and notes to all numbers in the cash flow.
Once the cash flow projection was complete, the full submission was structured and the deal referred to the Credit Team for assessment. The deal was approved the next day with client being notified of the good news. From there, an invoice was requested, documents drawn up and the deal settled a couple of days later.
In summary
On all new start ventures an upfront deposit is generally required – unlike 100% finance when a client has been self employed for 1-2 years and can provide financial statements. On this deal the client had requested the smallest deposit required so they could maximise working capital for the first couple of months. As this is the case, we were able to structure the finance approval so that only a 10% upfront deposit was required with the GST into the deal in the fourth month of the contract.
Even though this structure was the outcome for particular deal, we can also take collateral security over unencumbered assets to mitigate any upfront deposit, however this is assessed on a case by case basis i.e. age and nature of the goods.
New start deals need to be handled by a specialist Heavy Equipment Finance Company, in order to achieve an approval that provides conditions that best suit the client and their needs going forward.
As you can see from the information in this article, we try to make the application process very simple for our customers even though the back end work that we do is quite complex.
Please do not hesitate to call us on 1300 788 740 to discuss any funding scenarios relating to Heavy Equipment Finance.
