Equipment financing is secured on the thing you are buying, so the asset carries much of the risk that would otherwise fall on your accounts. We assess how banks are likely to view the asset and prepare the submission.
A machine has been quoted, a lorry specified, or the kitchen has to be replaced before the second outlet opens. The number is exact and it sits on a proforma invoice. This is the one financing decision where the thing you are buying does much of the work of getting it approved.
A bank looking at an unsecured facility asks whether your business can repay. Here it asks that too, then asks what the asset is worth, who else would want it, and how fast it could be sold. A strong asset can carry a company with a shorter record than an unsecured lender would take.
These are the banks’ requirements, not ours. They vary by institution and change over time.
Banks will finance a wide range of assets, though not on the same terms. The margin of finance, the tenure, and sometimes whether they will look at it at all, depend on how readily the asset could be resold.
It fits where there is a specific asset with a price, a supplier and a working life. Because the asset is the security, you can usually borrow a higher proportion of the cost, over a longer tenure and at a lower rate, than an unsecured term loan of the same size. It is also the structure most likely to work for a company two years old with nothing to charge.
It does not fit in several cases. Where the asset is highly specialised, custom built, or imported with no local service network, banks discount its resale value sharply, and you end up with an effectively unsecured decision carrying all the restrictions of a secured one. Where the asset has a short working life, a long tenure means paying for something that stopped earning years earlier. Where what you really need is the money around the machine, the freight, the duties, the installation and the raw material it will consume, financing covers the invoice value only; the rest is usually working capital financing. And if you are renovating a shop or buying the premises, there is no movable asset to secure, so a term loan is the facility.
| What | Why it matters |
|---|---|
| The asset, make and model | Banks hold views on brands and categories. A well known machine tool with dealers and parts in Malaysia is straightforward. A one-off import with no local agent is not. |
| New or used, and how old | Used assets attract a lower margin of finance and a shorter tenure. Many banks measure age at the end of the facility, not the start, which catches applicants out. |
| Margin of finance, and the deposit | Where your deposit comes from is itself assessed, because one raised by borrowing elsewhere leaves you more geared than the application shows. |
| Working life against tenure | The facility should end before the asset does. A request for longer than the equipment will realistically work is refused or shortened. |
| The supplier | Banks prefer suppliers they recognise, and will often pay them directly rather than releasing funds to you. An unknown overseas supplier adds a risk they cannot control. |
| Servicing it without the new asset | Banks rarely give full credit to the profit a machine is meant to generate. The test is whether current earnings carry the instalment alone. |
Enter the rate a bank has quoted you, or one you want to test. SMEBox does not lend and does not set rates, so there is nothing pre-filled here.
Name, company and a phone number is enough to start. We call you back, ask what the money is for, and tell you whether this is worth taking further before you send us anything sensitive.
We read the accounts and the bank conduct, and tell you where you stand against what banks are currently accepting. If this is the wrong facility, we say so. If we think no bank will approve you at present, we say that too, and what would need to change.
This stage usually takes three to five working days from receiving a complete set of documents.
We assemble the submission, present the financials consistently, set out the purpose of funds, and answer the questions a credit officer will ask before they ask them. You see it and approve it in writing before anything goes anywhere.
We lodge the application and handle the back-and-forth until the bank issues its decision. The decision on approval, amount and pricing is entirely the bank’s, and we cannot guarantee any outcome.
Banks typically take three to six weeks from a complete submission to a decision on this facility type.
SMEBox does not lend and does not set pricing. Rates, fees and terms are set by the bank and vary by facility, security, tenure and the bank’s own assessment of your business.
SMEBox does not lend and does not set pricing. Equipment financing is often structured as hire purchase, under which the bank owns the asset and ownership passes to you on the final payment, and hire purchase here is quoted as a flat rate. A flat rate is calculated on the original amount for the whole tenure, so the effective rate you actually pay works out roughly double the number quoted. Comparing a flat rate against the annual rate on a term loan is the commonest costing mistake on this facility. As a guide only, recent pricing has sat at 3.5% to 6% flat per annum, roughly 6.5% to 11% effective, with margins of finance of 80% to 90% for new assets and lower for used. Sourced from published bank rate cards, reviewed September 2026.
Where none of those apply, we will tell you so on the first call rather than take you through a process you did not need.
It depends on the asset. For new machinery and commercial vehicles from recognised suppliers, banks commonly finance 80% to 90% of the price. Used or specialised equipment attracts a lower margin. The deposit has to be genuinely yours; a bank that finds it was borrowed elsewhere reassesses the application.
Often yes, on tighter terms. Because banks measure the asset’s age at the end of the facility, a machine already well into its working life attracts a short tenure or none. A valuation from an assessor the bank accepts, and a dealer it knows, both improve matters.
Under hire purchase the bank owns the asset until the final instalment is paid. Under a secured term loan you own it from the start and the bank takes a charge over it. The differences show up in how the rate is quoted, how early settlement is calculated, and what you must do to sell the equipment early.
Yes, and the bank will normally require the policy assigned to it, so a claim pays the bank rather than you. Letting it lapse is a breach of the facility. It is a small point that causes real problems when it is forgotten at renewal.
It is usually the most realistic starting point. The asset gives a bank something to fall back on that an unsecured line does not, so the record required is often shorter. Expect a larger deposit and closer interest in the directors’ own records; what CCRIS and CTOS show is worth checking first.
Sometimes, through a sale and leaseback, where the bank buys the asset from you and you pay for it over time. It releases cash tied up in equipment you own. Banks apply it selectively, to substantial assets with a clear market value, and the sum offered reflects a discounted valuation.
If you are buying or renovating premises rather than plant, there is no movable asset to secure and a term loan is the facility. If the machine is being imported and the pressure is on paying the overseas supplier, trade financing handles that part and equipment financing takes over once the asset has landed. If the real squeeze is the raw material the new line will consume, that is working capital financing, and a good many manufacturers need both at once.
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