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You want to offer asset finance, but you’re not a finance expert: Top tips on choosing a partner who is

Five things to think about before you choose a partner

Now you are convinced of the benefits of offering asset finance options as part of your sales process, the next big question is “who should provide that finance?”. You’re not a finance expert yourself – but the good news is, there’s no need to be. Your best bet is to partner with a reputable, professional finance provider with experience in your industry, and practical knowledge about the best options for your clients. 

Before you choose your partner, make sure you have a solid understanding of five things.

  1. Your industry. How does structured finance operate in your industry specifically.
  2. Your business goals, and how structured finance help you achieve them.
  3. Product development in your industry. What’s at the forefront in both your industry and in financing equipment, technology and services in your industry.
  4. Structured finance. What is the latest thinking and innovations.
  5. Vendor finance. Whether this could be right for you, or is there a better way.

Overview of the four main finance structures available.

Asset finance can be structured in a number of way, and which is right for your clients’ business will depend on a number of factors. Your finance partner should be able to help you define which is right for your industry, and have the flexibility to change option with changing clients needs.

Our eBook spells out in detail how each option is different, but in general terms the different structures are as follows.

Operating lease. Operates like a rental agreement. Your client gains immediate use of the asset, without actually owning it. This kind of lease makes sense for equipment which goes out of date or redundant quickly – because the equipment is returned to the supplier at the end of the lease term.

Finance lease. Allows for your client to own the equipment at the end of the lease. It operates like a rental agreement, but with the option to purchase at the end – with a pre-determined residual payment. 

Equipment rental. Equipment rental is just that, rental of equipment which can be returned at the end of the lease. This is similar in structure to an operating lease, but typically has a shorter rental period, so is suitable for clients looking for temporary use of assets.

Commercial line of credit. A commercial line of credit operates like a master rental agreement with a pre-approved limit. You can draw down on funds at any time to acquire equipment – you don’t need to apply for additional funding and you repay the amount over the agreed term in monthly instalments.

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THE CHECKLIST: SELECTING THE RIGHT PARTNER

Partnering should be easy.

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Your sales team are experts in your products and services but they aren’t necessarily experts in finance. And in some cases, they may be reluctant to talk finance with clients, in case they find themselves out of their depth and unable to answer questions in detail.

That’s where you need a finance partner who can be involved as much or as little as suits you. 

The right partner should be able to offer help at every level. At the most basic level your partner should be able to provide training to your staff to allow them to handle conversations about finance themselves. They can also mentor your team and be on call and available to answer questions, or can attend meetings with clients as part of your sales team to lead the finance conversation. Or, if you prefer, your finance partner should be able to manage and control the finance part of the sale on your behalf.

2. Focus on relationships not transactions

In the same way that your clients expect responsiveness, flexibility, consistency and quick turn-around times from you – these are exactly the qualities you need in a finance partner. Look for a well-established, reputable firm that can flex around your needs, sales cycles and processes. 

3. Sector and business knowledge

Your finance partner needs to speak your language, and that means understanding your business and your sector intimately. But more importantly, a partner with a deep understanding of the industry will have a better understanding of the risks of each transaction, and will therefore be better able to price it accurately. Benefitting both you, and your clients.

In addition, a partner with industry insights will make a valuable contribution to discussions not only about asset finance, but about your business goals. They are likely to be familiar with the latest technology, equipment and thinking in the industry, through their experience and conversations with other companies. The gives them context when discussing your particular needs as well as an understanding of trends likely to impact your business in the future.

Why Eclipx Commercial?

We are a specialist business equipment finance company, backed by ASX-listed Eclipx Group, one of Australia’s leading diversified financial services organisations.

We serve a wide range of businesses and industries of all sizes, Australia wide, and can arrange finance options for your business from transactions as small as $10,000 to $10,000,000 or more.

Most importantly, our finance experts have industry experience, and take the time to understand your business before tailoring innovative finance solutions that are perfectly suited to you.

For a complete guide to offering finance and incorporating in your sales strategy, download The Equipment Manufacturer's Guide to Growing your Business:

DOWNLOAD THE GUIDE

If you would like more information about how we can help you jumpstart your sales growth please contact us at commercial@eclipx.com or call us at 1300 832 962. 

Anthony Roberts
Anthony Roberts
As Managing Director of Eclipx Commercial, Anthony is a true asset and equipment finance expert, having specialised in this area for over 20 years. Anthony’s role encompasses sales leadership, business development and strategic growth for Eclipx Commercial. He is passionate about delivering smarter, more innovative finance solutions to the market and empowering both staff and clients to achieve greater success.

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