How Long Does Equipment Finance Approval Take?

How Long Does Equipment Finance Approval Take?

Quick answer

A straightforward equipment finance application may be assessed relatively quickly, while a complex transaction can take longer.

The timing depends on the lender, loan amount, business history, equipment, documentation and whether further information or a valuation is required.

Approval and settlement are also separate stages. Even after approval, the lender may need invoices, insurance details and signed documents before paying the supplier.

What affects the approval time?

The strength of the initial application

An accurate, complete application is easier to assess than one with missing or inconsistent information.

Common requirements may include:

• identification

• ABN or ACN

• equipment quote or invoice

• bank statements

• financial statements

• details of existing debts

• information about the directors or guarantors

Lenders commonly ask for financial statements, proof of income, bank statements and identification when assessing business finance.

How long the business has traded

An established business with a clear repayment history may qualify for a streamlined process.

A new or rapidly changing business may need to provide:

• forecasts

• a business plan

• contracts

• interim financials

• evidence of industry experience

These additional checks can take more time but may be necessary to support the application.

The type and age of the equipment

Common assets with a clear market value may be simpler to assess.

Older, imported, specialised or privately sold equipment may require:

• valuations

• inspections

• proof of ownership

• additional supplier information

The loan amount and complexity

A small, straightforward equipment purchase is different from financing an entire fleet, production line or multi-asset project.

Larger or more complex applications may require additional approval levels within the lender.

Credit history

The lender may review the credit history of the business and its directors.

Recent missed payments, defaults or numerous credit applications can require further explanation and may affect the outcome. Moneysmart notes that lenders use credit-report information when deciding whether to approve credit.

Approval versus settlement

Approval means the lender has agreed to provide the finance, usually subject to conditions.

Settlement occurs when those conditions have been met and the lender pays the supplier or completes the transaction.

Between approval and settlement, you may need to provide:

• a final tax invoice

• proof of insurance

• signed finance documents

• supplier bank details

• vehicle or equipment identification

• evidence that any deposit has been paid

How can I avoid delays?

Prepare the documents early

Ask what information will be required before submitting the application.

Provide accurate figures

Make sure the information on the application matches bank statements, financials and supporting records.

Choose the equipment

A lender will generally need clear details of the asset before providing unconditional approval.

Respond promptly

If the lender requests clarification, a quick and complete response helps keep the application moving.

Avoid multiple unplanned applications

Submitting several separate credit applications may affect your credit file. Compare suitable options before applying rather than applying everywhere at once.

Practical example

An established plumbing business wants to finance a standard new work ute.

It provides the quote, identification and required business information immediately. Because the asset and transaction are straightforward, the assessment may be relatively simple.

A new manufacturing company financing imported specialist machinery may require forecasts, contracts, valuations and supplier checks, resulting in a longer process.

Common questions

Can finance be approved before I collect the equipment?

Yes. Finance will normally need to be approved and settled before the supplier releases the asset unless another arrangement has been made.

Can I obtain conditional approval?

Potentially. Conditional approval means the lender still requires certain information or conditions to be satisfied.

Does urgent finance cost more?

Not necessarily. Avoid choosing a loan solely because it appears faster. Compare the full cost and conditions.

Can a broker speed up the process?

A broker cannot control the lender’s assessment time, but submitting the application to a suitable lender with the correct supporting documents may help avoid preventable delays.

Key takeaways

• Approval times vary with the business, lender, asset and transaction.

• Complete documentation can prevent unnecessary delays.

• Approval is not the same as settlement.

• New, large or specialised transactions may require more assessment.

• Prepare early when equipment is needed by a specific date.

Working towards a purchase deadline?

Tattersalls Finance can help identify the required information and keep the application moving from enquiry through to settlement.

Internal links: Equipment Finance, New Business Equipment Finance, Contact

Schema: Article + FAQ