Good news loan for equipment fleets

COMPANIES continually upgrading and buying new equipment for their mining equipment fleets will now be able to get the working capital they need to optimise their fleet mix without being constrained by their financing structure, according to GE Commercial Finance.
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Staff Reporter

The company has recently launched Equipment Line, Australia's first multi-featured single secured loan facility secured entirely by equipment.

The loan facility offers a revolving line of credit, giving customers the benefits of being a cash buyer without having to go through the loan approval process.

GE Commercial Finance, Equipment Finance managing director Richard Bailey said this was a major advantage for organisations servicing the coal mining industry whose fleets needed change throughout the year.

He said the types of heavy equipment used in a coal mine continually changed as tasks diversified, and the new GE loan would allow fleet owners to do this without incurring additional costs.

Civil construction company Hazell Bros Group, Tasmania’s largest operator of plant and equipment, has used the loan facility since March and said it had supported the current growth of the business, which was now anticipating significant savings.

Hazell Bros managing director Geoffrey Hazell said the nature of his business meant equipment often needed to be obtained within a short timeframe, a task that could become difficult if cash was not readily at hand.

“It frees up more time to establish exactly where we want to go in terms of our equipment fleet, rather than continually reviewing the financial aspect of it. With our recent increase in contracts has come a need to expand our fleet, which has been made easier knowing we essentially have cash in the bank through GE’s facility,” Hazell said.

The facility also gives customers the option to prepay principal and re-draw on that principal throughout the year, benefiting businesses with surplus seasonal cash flows.

Hazell said this was an important feature for his business, and he now predicts significant savings in interest payments from more efficient use of excess working capital.

He said equipment contracts financed on variable interest rates could be prematurely terminated without incurring any fees, so the company had been able to dispose of unnecessary gear in recent months without losing out financially.

GE Commercial Finance said the loan was suitable for organisations with multiple assets worth at least $1 million.