Whether it be zero-emissions vehicles, the infrastructure required or facing a cost-of-living crisis, financing has become an integral part of a modern bus and coach operator’s toolkit. Last month, ABC’s Operator Showcase saw that 36 per cent of the participating operators identified the price of transitioning to be the biggest issue facing the change to zero-emissions buses.
After launching its EV Infrastructure Fund last year, Bus Finance Australia has listened to this feedback from Australia’s operators. Alongside its usual array of funding arrangements it has established over more than 20 years of experience in the industry, Bus Finance Australia has spent the past year venturing into the zero-emissions sphere to tackle the major issues impacting operators as they make the sustainable switch.
- Subscribe to our free weekly newsletter to receive the latest news and classifieds from Australasia’s bus and coach industry
- Don’t miss a second and subscribe to our monthly ABC magazine
“The EV Infrastructure Fund has been a slow burn over the past year, but we’ve helped a range of operators, OEMs and private schools adjust,” Bus Finance Australia finance director Brett Collins told ABC.
“We’ve funded a few electric buses and some smaller infrastructure, including chargers and power units. It’s a work in progress, but we’re also now looking at financing some zero-emissions fleets, larger depot infrastructure and power sources that includes sizeable charging stations.”
The start of the EV Infrastructure Fund last year was a milestone moment for Bus Finance Australia. After launching in 2004 to provide funding packages for bus operators, the independent business has now grown outside of its Victorian roots to service the national bus industry.
The latest offering from the financier involves focusing on all associated capital relating to the infrastructure required to support zero-emissions buses and coaches. From the latest battery electric bus technology to the lure of hydrogen fuel-cell transport, Collins has started helping numerous pioneering operators make the switch to zero-emissions networks.
“The uptake of our EV Infrastructure Fund matches the pace of the government’s decision-making when it comes to the transition,” Collins says.
“Operators have to make a huge investment decision when it comes to actioning depot conversions, so there’s no wonder there’s been some indecisiveness across the industry. I’m hopeful that our financing packages can help take the fear out of these decisions and encourage more businesses to invest in the future.”
Collins is hopeful that funds like Bus Finance Australia’s will prove calming for the nation’s operators in the next 12 months. Whether it be tendering for government metro contracts with zero-emissions conditions included or constructing regional depots that serve as sustainable homes for local transport networks, Collins is confident the EV Infrastructure Fund can help the industry build more activity in the space in the near future.
“I hope that this time next year we can help the industry have better understanding of where it’s heading,” he says.
“While we have our fund on hand, we also have our own financing arrangements with our various dedicated financiers that keeps us open to working in different ways with operators, depending on the application.”
It’s this flexibility that is allowing Bus Finance Australia to remain as a leading financial service provider in the local sector. While its latest zero-emissions offering is enticing to many, the company’s usual day-to-day bus finance and business purchase funding capabilities can help a wide range of industry members.
Collins’ logic is simple when it comes to the latest industry trends of sustainability – if a client is looking to buy and own a zero-emissions bus network, then Bus Finance Australia can offer its standard finance related funding packages. However, if the contract sees the government own the buses and lease them to the operators, the EV Infrastructure Fund comes into play.
“Changing to zero-emissions is about much more than the bus from a financial point of view,” Collins says.
“OEMs or vendors in the electric space may have their own way of financing things, but we can provide unique finance options that strips the complexity back for them,” Collins says.
“We want to compare apples to apples. We look at the equity or capital contributions involved up front.
“It’s one of the great features of the fund – besides financing the full amount of the vehicle, we can also finance the full amount required for the infrastructure, helping applicants preserve their equity in the process.”
This understanding comes from Bus Finance Australia’s industry experience. Over two decades, Collins’ deep involvement in the sector means he now sits in between the finance and bus industry spheres, helping both halves co-exist and thrive.
“We’re pretty lucky and unique in that way because we have the knowledge that helps us structure deals for operators that suit their purpose,” he says.
“We look at the contract tenure and its conditions and try structure our funding arrangements to help mitigate any contract risk at the end of its term.
“As the industry is evolving with the zero-emissions transition, the financial sector is also evolving to support it and match requirements.”
Collins knows this innate understanding of the industry, linked with financing, couldn’t come at a better time for operators. He knows that back in the day, operators could buy and use a bus for the best part of 15 to 20 years. With new zero-emissions models, the lifespan could half depending on contract terms. It’s these differences that need to be considered on the financial side of contracting.
While it’s just an extension of Bus Finance Australia’s existing efforts funding traditional diesel or hybrid bus fleets, Collins is continuing to work hard to ensure the added extras involved in transitioning to new technology is made easier for Australian businesses.
“We’re trying to expand this side and make people aware of our capabilities so that they can get another competitive quote and opinion,” he says.
“I encourage all in the industry looking to make this transition to call us and get another opinion so we can help you get the best quote out there. We may not suit everyone, but we know we can help get the best deal in the industry.”