Australia, C&L, Cranes & Lifting, Features, Finance

A beginner’s guide to financing a new crane purchase

Finlease's Chris Burke discusses financing a new crane purchase.

With uncertainty around interest rates, costs to manufacture and delivery times, crane businesses need to be confident when financing a new crane purchase. Chris Burke, Partner in Finlease, provides some valuable advice.

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“Financing cranes is not as simple as it seems. 18 months ago, crane companies were ordering machines with current interest rates at 4 per cent. Today the indicative market rate is 8 per cent. This makes a significant difference to the purchase of your machine.” 

“When you then factor in the Euro which has depreciated approximately 20 per cent in 12 months, combined with increases in crane prices, and it’s clear the cost of doing business has doubled and tripled in some cases. Unfortunately, this isn’t reflected in increase hire rates for cranes,” said Chris.

“These are some of the reasons why we are seeing a significant adjustment within the industry. Companies are trying to increase their rates to accommodate the increased cost of doing business. Some older crane businesses continue to close their doors and a new generation of business owners are stepping up to take advantage of the opportunities these closures are creating. When it comes to purchasing cranes, the actual purchasing power for a crane company 12 months ago compared to now is wildly different,” he said.

Before joining Finlease, Chris spent five years at the NAB, and completed a finance economics degree at Macquarie University. He bounced around a few different areas including business banking, foreign exchange and interest rate risk. Chris then moved back to Sydney and worked in asset finance which he liked. That’s where Finlease and Chris became affiliated.

“I got to know Jeff Wilson and Mark O’Donoghue by approving some of their crane applications and I’ve now been with Finlease for six years. I initially joined as what you’d call a “credit writer,” or “penciler” in old school terms. I would assess a crane business’s ability to borrow,” said Chris.

“Of course, I still deal with credit applications and financial analysis but a lot more of my time is spent with customers as opposed to sitting behind a desk and crunching the numbers,” he said.

In today’s ‘financing environment’ crane businesses should consider adapting a consultative approach to financing, says Chris.

“From a funding perspective, banks are now asking ‘what does your capital expenditure look like for the next three years?’ To answer these questions, we need to be face-to-face with customers. 

“I recently traveled interstate and spent time with customers I hadn’t seen for six months. We sat down for half a day and discussed how the business is trending, analysed the numbers and planned what it might look like for the next 12 to 24 months. This allows me to engage the lending base to ensure we’ve facilities in place to purchase X, Y and Z,” said Chris.

Chris explains what information crane businesses need to provide to secure ongoing finance for new cranes.

“Banks like the fact that businesses are planning purchases and what they plan to sell. Banks need to know that our customers are sitting down and conducting due diligence on their businesses.

“All the normal things around contracts, financial metrics and utilisation need to be calculated, but from a pure CapEx point of view, if you at least have a general idea as to what you’re thinking of doing, this will reassure the lending base,” said Chris.

Chris confirms there is a shift in investment from governments with money moving from infrastructure projects to the energy sector.

“We are seeing a shift in investment from Federal and State governments. There’s a national hydrogen plant being built in Gladstone, there are wind farms running from Cairns all the way down to Mudgee. The gas plants in South Australia are busier than ever trying to power the nation,’ said Chris.

“Recently the government announced $800 million in road funding for regional areas for the next three years. This road and energy investment all require craneage to a degree. So, do I think the investment’s being turned off? I don’t. I think it’s being shifted into other areas and as a crane owner, you need to be able to adapt. You shouldn’t have all your eggs in one basket, diversification is the key message here. This is always a key theme through finance. 

“At the moment Australia has the largest gap ever between population growth and residential dwelling approvals. Exaggerated by supply chains and recent immigration, it supports that residential housing construction is going to surge and push for the next five years to six years in an effort to reduce that gap,” he said.


Interest rates are front and center during conversations with crane businesses says Chris.

“We are asked about interest rates every day. If you are a crane owner buying a 300-tonner, that’s going to cost the better part of $4 million. If you finance it today at 8 per cent for five years, at the end of that term you don’t want to see that interest rates have come back down to 3 per cent because all your loan contracts on cranes are fixed. 

“Some customers are structuring finance on a two-year loan with a large residual in the hope that interest rates are going to curve and come back the other way. The talk is heading into 2025 we’re hopefully going to see rate cuts. Assuming we can control some of these economic indicators. For customers planning on buying larger machines this is incredibly important to know,” said Chris. 

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