Equipment finance
Equipment and asset finance
The equipment secures the loan, so rates typically sit well below unsecured business lending. Structure affects your tax position — we explain the differences.
- Commercial vehicles, machinery, fit-out and technology
- Chattel mortgage, finance lease and rental
- New and used assets
- Terms generally 1 to 7 years
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Equipment finance is secured against the asset being purchased, which is why it prices better than unsecured commercial lending. The structure you choose changes both your balance sheet and your tax treatment.
The three structures
A chattel mortgage means you own the asset from day one and the lender registers an interest against it. A finance lease means the lender owns the asset and you lease it, with a residual at the end. A rental is an operating expense with no ownership at all.
We are finance brokers, not accountants. We can explain how each works and what it costs. Which one suits your tax position is a conversation for your accountant, and we would rather you had it before signing than after.
To be considered you need to be 18 or over, an Australian citizen or permanent resident, currently working, and earning at least $30,000 a year before tax.
Past credit problems are not a barrier. Defaults, arrears and a low credit score are all things our lenders see every day. What matters is your income now, not the worst month you have had. If you are between jobs or your only income is a Centrelink payment, our panel cannot help — and we would rather tell you that up front than put an enquiry on your credit file that goes nowhere.
What to expect
Chattel mortgage
You own the asset immediately. Commonly allows GST on the purchase price to be claimed in your next BAS, subject to your circumstances.
Finance lease
The lender owns the asset and leases it to you. Lease payments are generally deductible; a residual applies at end of term.
Rental or operating lease
Treated as an operating expense with no asset on your balance sheet. Suits equipment you replace regularly.
Used assets financed
Many lenders fund quality used equipment, though age limits and valuation requirements apply.
Common questions
Answers, in plain terms
What can be financed?
Commercial vehicles, trucks, trailers, excavators and earthmoving equipment, manufacturing machinery, medical and dental equipment, commercial kitchen fit-out, and IT hardware.
Which structure should I choose?
It depends on your tax position, cash flow and whether you want the asset on your balance sheet. We explain how each works; your accountant should confirm which suits you.
Can I finance used equipment?
Often yes. Lenders apply age limits, usually based on the asset's age at the end of the term, and may require an independent valuation.
Is a deposit required?
Not always. Many facilities fund 100% of the purchase price for established businesses. Newer businesses or unusual assets may require a contribution.
Does this fall under consumer credit rules?
No. Equipment finance for business purposes sits outside the National Credit Code, so comparison rates are not mandated. We still translate every offer into a total cost figure.
What is a residual or balloon?
A lump sum owing at the end of the term. It lowers monthly payments but you pay interest on a higher balance throughout, and you must refinance, pay it out, or return the asset at maturity.
Costs and disclosures
The numbers, stated plainly
Every lender must publish a comparison rate. It folds the interest rate and the mandatory fees into one figure so products can be compared honestly. We show ours here rather than in the fine print.
Repayment period: minimum 1 year (2 years on loans under $10,000), maximum 7 years. Interest rates: 9.00% p.a. to 22.00% p.a. depending on security, credit history and the lender. Maximum comparison rate: 28.48% p.a. — the ceiling across all our products, being a $5,000 loan over 2 years at 22.00% p.a. On our representative $30,000 over 5 years basis, the maximum is 22.48% p.a.
Representative example: a $30,000 unsecured personal loan over 5 years at 13.00% p.a. (comparison rate 13.44% p.a.), with a $295 establishment fee and no monthly fee, has repayments of $682.59 per month and a total amount payable of $41,251.
Fees: establishment fee $205 (secured) or $295 (unsecured). No monthly service fee. Lenders may charge fees for missed payments or early payout — set out in your credit contract before you sign.
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
See what you qualify for
Two minutes, no documents, and no impact on your credit score. We reply the same business day.