Compare the full repayment profile before accepting lower equipment payments
Compare all scheduled equipment-finance payments and end-of-term obligations rather than judging a proposal only by its smaller recurring amount.
Corporate Recovery Partners
01 / 06
The monthly figure catches your attention
The business is struggling with equipment repayments and receives a proposal showing a smaller monthly amount. That may help immediate cash flow, but compare the complete arrangement before deciding. A different term, fee or final payment can change what the business must ultimately fund. Ask the lender and adviser to explain the actual schedule rather than relying on one advertised figure.
Obtain the current arrangement and proposed terms, including all stated payments and charges. Record the time period covered and what remains at the end. Check unclear figures with the provider. Do not compare a remaining balance under one agreement with the entire term of another without explaining the difference; that can make the apparent saving misleading.
Business.gov.au's cash-flow guidance considers when outgoing payments occur. Place the complete proposed schedule into the forecast, including any larger later amount. Keep uncertain refinancing or sale proceeds separate. An improvement in the next three monthly balances does not establish that the business can meet a final obligation that falls outside the short report being reviewed.
Imagine a proposal reducing regular payments while including a final amount that the current short-term forecast does not show. The business needs to understand how that later amount could be funded. The example does not assume every equipment-finance product has such a structure. It highlights a question to answer from the actual documents rather than a conclusion drawn from the lower monthly number.
Ask about security, guarantees, early-exit conditions and any costs relevant to the change. Obtain appropriate advice before agreeing. Consider whether the equipment's expected work supports the full commitment, not simply whether a smaller instalment feels more comfortable today. If the company remains financially distressed, bring that context into the discussion instead of treating a revised repayment as proof of recovery.
Keep the comparison and final documents together and update the payment calendar if a change is made. Explain any later funding assumption explicitly. A lower regular payment can be useful, but its value depends on the whole arrangement and the business's ability to perform it. The decision should remain understandable when the less visible payments eventually come due.
