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| Replacement Finance
Replacement Finance can be used for customers where:
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They have a good credit history,
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They are looking to obtain replacement equipment finance where the goods are similar to those currently under finance (eg. replacing an existing truck with a truck),
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The asset being financed meets one of the acceptable equipment finance category types (refer section below),
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The account to be replaced has been operating for a minimum of 12 months and is rated good,
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The contract being replaced has been finalised within the last 3 months or will be finalised within 21 days of drawdown of the new commitment,
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The proposed monthly repayments do not exceed 125% of the commitment being replaced,
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The parties to the proposed contract are the same as the account to be replaced,
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The replacement amount meets detailed thresholds and the total amount approved for the customer does not exceed $500K, and
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Time in business criteria is a minimum of 2 years.
The following equipment types can be financed under Replacement Finance products:
- Motor Vehicles (Car, Light or Heavy Commercial vehicle <3.5 tonnes) with maximum amount financed <$150K
- Prime Movers, Trailers, Agricultural Equipment (Tractor, Header or Harvester), Yellow Goods or Forklifts with maximum amount financed <$400K
- New Specialist Medical Equipment to $150K
Scenario Example:
Matt is a long haul Truck driver and has been in business for 3 years. He does not own a home and he does not want to bother with providing financials. He needs to replace his existing Truck as he has new contracts worth a lot to him, and requiring him to provide a very reliable service. He bought his current truck for $200,000 (under Commercial Hire Purchase) 2 years ago and pays $4,071 a month in repayments. He’s always made his repayments on time and his loan account is rated “good.”
Under the “replacement loan” criteria, Matt would qualify for the loan, up to $250,000 ($5,088 per month) without having to provide financials or any other security.
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