Equipment Purchase Proposal

# Equipment Purchase Proposal

## Purpose
Use when requesting approval for significant equipment purchases to demonstrate due diligence and justify the investment.

## When to Use
An equipment acquisition proposal with needs analysis, vendor comparison, total cost of ownership, financing options, and implementation timeline.

## Instructions
1. Review the template below and familiarise yourself with the structure
2. Replace all [bracketed placeholders] with your business details
3. Customise the tone and formatting to match your brand
4. Save in your preferred tool (Xero or Notion)

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## Equipment Purchase Proposal

**Equipment:** [Equipment Name / Description]
**Submitted by:** [Your Name], [Your Role]
**Department:** [Department]
**Date:** [Date]
**Reference:** [EQ-001]

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### Executive Summary

This proposal requests approval to purchase [equipment description] at a total cost of $[Amount] + GST. This investment is required to [primary justification, e.g. replace ageing equipment that is no longer reliable / increase production capacity to meet growing demand / improve quality and reduce rework]. The equipment will pay for itself within [X] months through [mechanism, e.g. increased output / reduced maintenance costs / improved efficiency].

### Needs Analysis

**Why This Equipment Is Needed:**

1. **[Reason 1, e.g. Current equipment reliability]**
   - [Current equipment] is [X] years old, exceeding its expected useful life of [X] years
   - Maintenance costs in the past 12 months: $[Amount] (up [X]% from prior year)
   - Unplanned downtime in past 12 months: [X] hours, costing approximately $[Amount] in lost productivity

2. **[Reason 2, e.g. Capacity constraints]**
   - Current capacity: [X] units/jobs per [period]
   - Demand: [X] units/jobs per [period]
   - We are currently [turning away work / outsourcing / running excessive overtime] at a cost of $[Amount]/month

3. **[Reason 3, e.g. Quality improvement]**
   - Current [defect/rework] rate: [X]%
   - New equipment expected to reduce this to [X]%
   - Annual cost of rework: $[Amount]

### Vendor Comparison

| Criteria | Vendor A: [Name] | Vendor B: [Name] | Vendor C: [Name] |
|----------|-----------------|-----------------|-----------------|
| Equipment model | [Model] | [Model] | [Model] |
| Purchase price | $[Amount] | $[Amount] | $[Amount] |
| Warranty | [X] years | [X] years | [X] years |
| Delivery time | [X] weeks | [X] weeks | [X] weeks |
| Installation included | Yes / No | Yes / No | Yes / No |
| Training included | Yes / No | Yes / No | Yes / No |
| After-sales support | [Rating] | [Rating] | [Rating] |
| Local service availability | Yes / No | Yes / No | Yes / No |
| References available | Yes / No | Yes / No | Yes / No |

**Recommended Vendor: [Vendor Name]**
**Rationale:** [Brief justification for selection, e.g. Best combination of price, warranty, and local support. Two reference checks confirmed reliability and service quality.]

### Total Cost of Ownership (5 Years)

| Cost Item | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total |
|-----------|--------|--------|--------|--------|--------|-------|
| Purchase price | $[Amount] | - | - | - | - | $[Amount] |
| Installation & setup | $[Amount] | - | - | - | - | $[Amount] |
| Training | $[Amount] | - | - | - | - | $[Amount] |
| Maintenance (scheduled) | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] |
| Consumables | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] |
| Insurance | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] | $[Amount] |

**5-Year Total Cost of Ownership: $[Total]**

### Financing Options

| Option | Details | Monthly Cost | Total Cost |
|--------|---------|-------------|------------|
| Outright purchase | Pay in full | - | $[Amount] |
| Equipment finance | [X]-month term at [X]% | $[Amount]/month | $[Amount] |
| Operating lease | [X]-month lease | $[Amount]/month | $[Amount] |
| Chattel mortgage | [X]-month term at [X]% | $[Amount]/month | $[Amount] |

**Recommended Financing: [Option]**
**Tax implications:** [Brief note on depreciation, GST credits, or lease deductibility. Recommend confirming with accountant.]

### ROI Analysis

| Metric | Current (Without Purchase) | With New Equipment | Annual Benefit |
|--------|--------------------------|-------------------|----------------|
| Production capacity | [X] units/period | [X] units/period | $[Amount] additional revenue |
| Maintenance costs | $[Amount]/year | $[Amount]/year | $[Amount] saved |
| Downtime costs | $[Amount]/year | $[Amount]/year | $[Amount] saved |
| Rework/quality costs | $[Amount]/year | $[Amount]/year | $[Amount] saved |
| Energy costs | $[Amount]/year | $[Amount]/year | $[Amount] saved |

**Total Annual Benefit: $[Amount]**
**Payback Period: [X] months**

### Implementation Timeline

| Week | Activity |
|------|----------|
| Week 1 | Purchase order placed, financing arranged |
| Week 2-[X] | Manufacturing/delivery lead time |
| Week [X] | Delivery and installation |
| Week [X] | Commissioning and testing |
| Week [X] | Staff training |
| Week [X] | Full operation, old equipment decommissioned |

### Disposal of Existing Equipment

| Option | Estimated Return | Recommendation |
|--------|-----------------|----------------|
| Trade-in with vendor | $[Amount] | [Recommended / Not available] |
| Sell privately | $[Amount] | [Recommended / Not recommended] |
| Auction | $[Amount] | [Recommended / Not recommended] |
| Dispose / scrap | $0 (disposal cost: $[Amount]) | Last resort |

### Approval

| Approver | Name | Decision | Signature | Date |
|----------|------|----------|-----------|------|
| Department Manager | _______________ | Approve / Decline | _______________ | _______________ |
| Finance Manager | _______________ | Approve / Decline | _______________ | _______________ |
| Director / Owner | _______________ | Approve / Decline | _______________ | _______________ |

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**Complexity:** intermediate | **Setup time:** 25 minutes | **Tools:** Xero, Notion, Airtable