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New year, new growth goals for your healthcare/fitness business? Having the right equipment can be a huge assist

Desperately seeking business growth?
If you are an allied health or fitness business, asset finance could be the answer.

Traditional financial institutions, like banks, are often not small business friendly. They don't understand it, they see it as intrinsically risky, and without a track record of profitability, they are unwilling (and unlikely) to lend money or finance equipment. And if you have the added challenge of being a start-up, you may be finding that access to the finance you need is holding you back. 

This is where alternative forms of finance, like asset finance, can help.

Note of caution - make sure you ask yourself the important questions before you talk to anyone about finance. There are a wide range of options and structures available and they won't all suit your business - thinking carefully about how your business is structured and the equipment you need will ensure you get a solution which will help, not hinder, your success.

Make sure you ask yourself these important questions before you talk to anyone about finance.


  1. What kind of equipment do you need and how much does it cost?
  2. What is the lifespan of your equipment?
    The useful life of your equipment will influence the financial structure of a loan, or other finance you may need.
  3. What will you do with the equipment when you no longer need it?
    Will your equipment be worth anything when you have finished with it? Is there an active secondary market, will it be easy to sell it, and if so, how much are you likely to get? Will the equipment be worth nothing? These are questions which influence the structure of any finance you get.
  4. Is there a chance you may want to upgrade (swap equipment over) early?
    Some leases allow for upgrades before the lease is up - this is something worth checking out.
  5. Is there a chance you will want to return equipment early?
  6. Will the equipment need servicing or maintenance you can't do yourself?
  7. What is your cashflow likely to look like - will it be smooth and relatively equal across different times of the year, or is your business seasonal, or likely to be busier at certain times.
    Your payments can often be structured to reflect your cash flow projections and constraints, so that you pay more when you earn more, and less when you earn less.

Talk to someone who is forward, not backward looking

There is an important distinction between asset finance providers, like Eclipx Commercial, and more traditional financial institutions, like banks. Banks tend to be backward looking - they want to see a number of years of profitability before they will lend, but at Eclipx we do things differently. Where banks focus on your track record, we look at your capacity to generate income, the sector you are in and make an assessment about how likely your business is to succeed and become profitable.

Take 24 hour gyms as a case in point. These kinds of gyms, which provide a low-cost gym membership without the bells and whistles of a full-service gym, in other words a much lower cost of operation, have grown rapidly in recent years, on the back of their appeal to shift workers and others who don't have a 9-5 lifestyle. Nonetheless, because the concept is relatively new, and track records are short, financial institutions are wary of lending to them. And this can be the case with any number of potentially successful small businesses.

It's the classic catch-22. You can't borrow money without a history of success, and you can't create a history of success without the finance to buy the equipment you need to grow.

Asset finance can be an innovative solution to an age-old problem

At Eclipx Commercial, we look at your business through a different lens. We are comfortable providing finance to income-generating small and medium businesses which don't necessarily have a long track record, or significant assets to lend against.

We partner with you to understand your business and the equipment you need, including its rate of obsolescence, and then structure an asset finance solution to suit. We provide finance to a wide range of industries and businesses, so can talk knowledgably about the markets you operate in, and offer insights based on our experience with other businesses in your sector.

Match your finance to your equipment, not someone else's

If you use equipment which is likely to need upgrading regularly, every 3-4 years for example, then typically a shorter, operating lease will suit. As will the ability to hand back equipment at the end of the lease (and potentially mid-lease) and re-finance new equipment.

Fitness equipment generally needs to be upgraded regularly, because this is one of the bases on which gyms compete. New (and existing) members want the latest and most sophisticated machines on the market, so gym owners need to change equipment over as soon as possible when new, improved machines become available.

If, however, your equipment has a longer lifespan and will remain useful to you for longer, then a long lease with different provisions for the end of the lease will suit. Cosmetic procedures which use laser technology, for example, are very much on the rise. Most lasers have a much longer life span than fitness equipment - typically 8-10 years.

Access to the secondary market - our competitive advantage.

When it comes to pricing asset finance solutions, our ability to access the secondary market to sell equipment which has been returned to us is one of our competitive advantages, and has a direct impact on our ability to price competitively.

Eclipx Group is the owner of Grays Online, Australasia's largest industrial and commercial online auction business. Grays Online is highly efficient sales channel through which we can sell equipment, but it also provides us with accurate information about the residual value of all manner of equipment in different sectors.

Conclusion

Your ability to optimise your capital structure and finance the equipment you need at the best possible rate at with the most flexible terms is crucial to your long term success. You'll need a finance partner that gets that. 

For more top tips on how to grow your business, download our free guide for Australian businesses, "The SME owner's guide to growing your business" DOWNLOAD THE GUIDE

John Russell
John Russell
John is a Business Development Manager at Eclipx Commercial, specialising in the healthcare and fitness industries. John is passionate about helping clients to grow their business and shares the Eclipx Commercial vision of solving client capital needs by creating unique financial solutions.

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