For Alex Mutua, owning a car has always meant more than achieving a personal milestone. His dream is to own a vehicle, use it to offer taxi services, earn a living, and gradually build his own business.
After seeing the rising demand for digital taxi services in Kenya, Mutua believes he can turn his passion for driving into income. He has already begun exploring ride-hailing platforms, identifying potential customers, and thinking through day-to-day operations.
But he does not own a vehicle yet.
Like many aspiring entrepreneurs, Mutua understands that buying a car requires substantial capital, which may be difficult to raise from personal savings alone. Saving the full purchase price could also delay his plans to enter the transport business.
However, Mutua remains hopeful. Through its Asset Financing product, Equity Bank provides businesses with financing to acquire capital assets, including motor vehicles, construction equipment, agricultural equipment, industrial machinery and office and IT equipment.
For someone like Mutua, the facility offers a potential route to acquire a vehicle without paying the full purchase price upfront.
How Asset Financing Works
Asset financing is a credit facility that enables a business to acquire equipment or other assets needed for its operations.
Instead of waiting to save enough to buy a car, Mutua can approach Equity Bank and apply for financing for the vehicle he intends to use in his digital taxi business.
The bank offers different financing levels, including 50 per cent, 60 per cent, 70 per cent, and full financing, and applicants can indicate their preferred option through its online vehicle financing application.
If Mutua identifies a vehicle worth Ksh1.5 million, for example, and requests 70 per cent financing, the amount sought from the bank would be Ksh1.05 million. He would need to cover the remaining Ksh450,000, plus any applicable charges.
The actual financing amount and contribution required would depend on the bank’s assessment and the terms offered to the applicant.
The purchased asset can serve as security for the loan. This provides an alternative to relying entirely on other forms of collateral.
Equity Bank also offers flexible repayment arrangements, with a loan tenure of up to five years. The amount an applicant can borrow depends on their ability to repay.
This means Mutua would need to show that his expected business income, together with any other qualifying income sources, can support the proposed repayments.
What Mutua Needs Before Applying for Equity Asset Financing
Before approaching the bank, Mutua would need to establish his business financing requirements and identify the vehicle he intends to acquire.
Equity Bank requires applicants seeking business asset financing to have an active account with the bank.
For businesses registered as companies, the documents required include a company PIN certificate, identification documents and KRA PIN certificates for directors, the latest annual returns, a CR-12 and filing receipt, a current tax compliance certificate and a board resolution authorizing borrowing and the pledging of security.
Applicants must also provide relevant company registration documents, where applicable, and explain the purpose of the financing.
The bank also requires applicants to demonstrate other income sources that could support loan repayment.
Mutua would therefore need to prepare a realistic business plan showing how he intends to operate, generate revenue and meet his financial obligations.
Also Read: How to Use Equity Overdraft Facility When Your Account Balance is Low
How to Apply for Asset Financing
Equity Bank has an online application process through which interested customers can submit their vehicle financing details.
The applicant is required to provide their name, email address and telephone number, indicate whether they are an existing Equity customer or a new customer, and provide their location.
They must also specify the asset they want financed, the level of financing they need, and the estimated purchase price of the vehicle.
After submitting the application, the bank’s team contacts the applicant to discuss the available financing options.
Mutua can also visit an Equity Bank branch to enquire about the facility, understand the applicable charges, and confirm the requirements for his application.
For aspiring entrepreneurs like Mutua, the opportunity lies in turning an idea into a business by identifying the right asset, preparing a viable repayment plan and exploring financing options that match their financial capacity.
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