Equipment finance that keeps your capital working
The gear that earns your business money should not have to be paid for in one hit. Equipment finance spreads the cost of income-producing assets over their working life, so your cash stays in the business while the equipment pays for itself. The products are close cousins of commercial vehicle finance, with a few important differences in how lenders value and structure them.
What equipment finance covers
Equipment finance is asset finance for the tools of a trade rather than for vehicles on the road. It funds almost anything a business uses to generate income and that has a resale value the lender can take security over. Specialised or fast-depreciating items can still be financed, but the structure and term are matched to how long the asset realistically holds value.
- Machinery and manufacturing plant
- Construction and earthmoving equipment
- Medical, dental and veterinary equipment
- Hospitality fit-out, ovens and refrigeration
- IT hardware, servers and point-of-sale systems
- Trailers, forklifts and yellow goods
How it is structured
The same family of products used for commercial vehicles applies here. A chattel mortgage gives you ownership from day one with the lender holding security over the equipment, and a GST-registered business can usually claim the GST on the purchase up front. A finance lease or rental keeps the asset on the lender's books and you expense the payments, which suits equipment you expect to replace at the end of the term.
Equipment that depreciates quickly — technology is the classic example — often suits a lease or rental, because you are paying for the use of the asset rather than buying something you will want to upgrade. Long-life machinery more often suits a chattel mortgage where ownership and depreciation deductions make sense.
Why finance rather than buy outright
Paying cash for equipment feels prudent, but it ties up working capital you may need for wages, stock or the next opportunity. Financing matches the cost of the asset to the income it produces, smooths cash flow and preserves your borrowing capacity for other purposes. The example below shows a typical structure with a modest balloon.
That figure is illustrative only — not a quote or an offer of finance — and assumes a fixed rate for demonstration. Equipment rates vary more than car rates because the asset class matters so much: a lender prices well-understood, easily resold machinery very differently to a one-off specialised rig.
What affects your rate and approval
Lenders look at the asset and the business together. A mainstream, liquid asset from a recognised manufacturer is easy to fund; a bespoke or rapidly depreciating item narrows the panel and lifts the rate. On the business side, time trading, GST history and director property ownership all feed into eligibility and pricing, the same way they do for commercial vehicles.
- Asset type, age, condition and resale liquidity
- New versus used and whether it is from a dealer or private sale
- Time in business and ABN/GST history
- Loan size — smaller deals are often approved on minimal documentation
Illustrative repayment example
Figures below are calculated with our repayment engine for the scenarios shown — not a quote or an offer of finance.
Equipment, 10% balloon
- Amount financed
- $80,000
- Term
- 5 years
- Balloon (10%)
- $8,000
- Total repaid
- $101,300
Illustrative only. Each example assumes a fixed annual rate (shown per scenario) for demonstration and that fees are not included. Your actual rate, fees and repayments depend on the lender, your credit profile, the asset and how the deal is structured.
Equipment, 10% balloon: financing $80,000 over 5 years at an assumed 9% p.a. with a 10% balloon of $8,000 is about $1,555 per month ($101,300 total).
Frequently asked questions
Can I finance used or second-hand equipment?
Yes. Used equipment is commonly financed, though the lender will assess its age, condition and how readily it could be resold. Specialised or older equipment narrows the lender panel, which is where comparing across multiple lenders pays off.
Is equipment finance tax-deductible?
Generally the interest and depreciation (chattel mortgage) or the rental payments (lease) are deductible to the extent the equipment is used for business, subject to the rules that apply in the relevant year. This is general information, not tax advice — confirm the treatment with your accountant and we will structure the finance accordingly.
How large or small a purchase can I finance?
From a few thousand dollars of tools through to major plant. Smaller amounts can often be approved on a streamlined, low-documentation basis, while larger deals usually need financials. We will tell you which category your purchase falls into before you apply.
Can I finance equipment for a new business?
Yes, though the panel is narrower for new ABNs and the rate may be higher. Some lenders specialise in start-ups and newer businesses. Matching you to one of those lenders upfront avoids a declined application on your file.