Can I finance used equipment in Australia?

Yes. Most equipment finance lenders in Australia will finance used equipment, though rates are typically 1-2% higher than for new equipment. The equipment usually needs to be less than 10-15 years old, in good working condition, and from a recognised manufacturer. Some lenders also cap the finance term based on the age of the equipment.

Do I need a deposit for equipment finance?

Not always. Many lenders offer 100% financing for new equipment, meaning no deposit is required. For used equipment or higher-risk borrowers, a deposit of 10-20% may be requested. Providing a deposit generally improves your rate and increases your chances of approval.

Is it better to buy equipment outright or finance it?

Financing preserves your cash for working capital and other business needs, which is usually more valuable than saving on interest costs. The tax benefits of equipment finance — depreciation, interest deductions, and GST recovery — can also make financing more cost-effective on an after-tax basis. If you have surplus cash with no alternative productive use, buying outright saves interest, but this is rarely the optimal approach for growing businesses.

How long does equipment finance approval take?

For straightforward applications with established businesses, many lenders provide conditional approval within 24 hours and can settle within 3-5 business days. More complex deals — high-value equipment, newer businesses, or unusual assets — may take one to two weeks. Having your documents (quotes, bank statements, ID) ready before you apply speeds the process significantly.

2 March 20267 min read

Equipment Finance Rates in Australia: What to Expect in 2026

Tradesperson working with financed equipment on a construction site

How Equipment Finance Rates Work

Equipment finance in Australia is structured differently from standard business loans. Because the equipment itself serves as security for the finance, rates are generally lower than unsecured borrowing. The lender has a tangible asset to recover if the borrower defaults, which reduces their risk and allows them to offer more competitive pricing.

Rates are influenced by several factors: the type of equipment being financed, whether it is new or used, the borrower's credit profile and trading history, the loan-to-value ratio, the finance product structure, and general market interest rates set by the Reserve Bank of Australia.

Types of Equipment Finance Products

Chattel Mortgage

Australia has several distinct equipment finance structures, each with different rate profiles, tax implications, and ownership arrangements. Understanding which product suits your situation can save you thousands over the life of the finance.

You own the equipment from day one — the lender holds a mortgage over it as security
Interest is charged on a declining balance, similar to a home loan
Current rates: approximately 5.5-9% for established businesses with good credit
GST can be claimed upfront on the full purchase price
Interest payments are tax deductible, and the asset can be depreciated
Most popular structure for businesses registered for GST

Hire Purchase

Under a hire purchase agreement, the finance company purchases the equipment and hires it to your business. You take ownership at the end of the agreement, typically for a nominal amount. This structure is common for vehicles and heavy machinery.

Current rates: approximately 6-10% depending on the asset and borrower profile
Ownership transfers to you at the end of the term
Fixed repayments make budgeting straightforward
Interest is tax deductible and the asset can be depreciated
Balloon or residual payments can reduce monthly costs

Operating Lease and Rental

Operating leases and rental agreements are used when you want to use equipment without owning it. The finance company retains ownership, and you return the equipment at the end of the term. This suits technology assets that depreciate quickly or equipment you only need for a specific project.

Current rates: approximately 8-15% equivalent, though quoted as a rental amount
No ownership — return the equipment at the end of the term
Often includes maintenance or upgrade options
Entire rental payment is typically 100% tax deductible as an operating expense
Suits businesses that prefer not to carry assets on their balance sheet

What Affects Your Rate

Within each product category, the rate you are offered depends on your individual risk profile and the specifics of the transaction.

Time in business — Businesses with 3+ years of trading history access the best rates. Under 2 years typically attracts a premium of 2-4%.
Credit score — A clean credit file with a Veda/Equifax score above 600 opens the most competitive pricing.
Equipment type — Standard assets (vehicles, common machinery) get better rates than niche or custom equipment.
New vs used — New equipment typically attracts rates 1-2% lower than used equivalents because it holds its value better as security.
Deposit — Putting down 10-20% reduces the lender's exposure and can improve your rate by 0.5-1.5%.
Revenue strength — Strong and consistent monthly revenue demonstrates repayment capacity and improves pricing.

How to Get the Best Equipment Finance Rate

The single most effective thing you can do is compare multiple lenders. Equipment finance is a competitive market in Australia, and rates can vary by 3-5% between lenders for the same transaction. What one lender considers high risk, another may view favourably based on their portfolio focus and risk appetite.

A comparison platform like FundingCheck matches your business profile against 30+ lenders in a single enquiry, showing you the range of rates and structures available for your specific equipment purchase. This takes minutes rather than the days or weeks of approaching lenders individually.

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