Equipment Finance in Australia

Equipment finance covers any lending arrangement designed to help a business acquire physical assets — from excavators and CNC machines to commercial vehicles, restaurant fit-outs, and medical imaging equipment. Rather than paying $50,000 or $150,000 upfront, you spread the cost over a fixed term (typically 12 to 60 months) while using the equipment from day one. The asset itself usually acts as security for the loan, which means approval criteria can be more flexible than for unsecured lending.

In Australia, the equipment finance market exceeds $90 billion in outstanding balances according to the Australian Finance Industry Association. This scale means lenders compete aggressively on rates, which benefits borrowers who compare multiple offers rather than accepting the first quote from their equipment dealer's in-house finance arm.

The key advantage over paying cash is preserving working capital. A construction business that spends $120,000 on a new excavator from cash reserves has $120,000 less to cover payroll, materials, and unexpected costs. Equipment finance lets that same business deploy the excavator immediately while spreading payments across the asset's productive life — matching cash outflows to the revenue the equipment generates.

Australian businesses typically choose between three equipment finance structures, each with different ownership, tax, and cash flow implications. The right choice depends on whether you want to own the asset outright, claim GST credits upfront, or keep the equipment off your balance sheet.

A chattel mortgage is the most common structure for businesses registered for GST. You take ownership of the equipment from settlement, the lender holds a mortgage over it as security, and you make fixed monthly repayments over the term. Because you own the asset, you can claim depreciation and interest as tax deductions, and you claim the full GST credit on the purchase price in your next BAS — a significant cash flow benefit on high-value equipment.

A hire purchase arrangement means the finance company purchases the equipment and hires it to you. You gain ownership only after the final payment (or a residual balloon payment). Tax treatment is similar to a chattel mortgage — you claim depreciation and interest — but the GST credit is claimed progressively on each repayment rather than upfront. This can suit businesses that prefer smaller periodic GST credits rather than one large claim.

An operating lease keeps the asset off your balance sheet entirely. The lessor owns the equipment for the full term, and you pay a fixed rental. At the end of the lease you can return the equipment, negotiate a purchase, or upgrade to a newer model. Lease payments are fully deductible as an operating expense. This structure suits businesses that need to refresh equipment regularly — such as IT companies cycling laptops every three years or logistics firms replacing delivery vehicles.

Equipment finance eligibility is generally broader than unsecured business lending because the asset itself provides security. Lenders have less risk when they can repossess a clearly identifiable piece of equipment in the event of default, which translates to more relaxed credit requirements and often lower interest rates.

Through FundingCheck, the minimum criteria to see indicative equipment finance options are straightforward: your business must have been trading for at least 6 months, generate a minimum of $10,000 in monthly revenue, and hold a registered ABN. Sole traders, partnerships, trusts, and companies are all eligible. You do not need to provide property as additional security.

The equipment itself matters too. Lenders prefer assets with strong resale markets — vehicles, earthmoving machinery, commercial kitchen equipment, and medical devices all perform well. Niche or highly specialised equipment with limited secondary buyers may face tighter loan-to-value ratios or require a larger deposit. New equipment from established manufacturers is generally easier to finance than used or imported machinery.

FundingCheck simplifies equipment finance by comparing your business profile against lending criteria from over 30 Australian lenders simultaneously. Instead of submitting separate applications to banks, dealer finance arms, and specialist equipment lenders, you complete one short qualification check and see which lenders want your business — along with indicative rates and terms.

The process takes under a minute. Select 'Equipment Finance' as your product, enter basic details about your business (trading history, monthly revenue, loan amount), and provide your contact information. There is no credit check at this stage — your credit score is not affected. FundingCheck's matching engine returns indicative options ranked by estimated cost, so you can compare before committing to a formal application with any lender.

Once you choose a lender, a FundingCheck specialist guides you through the full application. For equipment finance this typically involves a quote or invoice for the equipment, 3 months of business bank statements, and identification. Many lenders provide formal approval within 24 to 48 hours for straightforward applications.

Equipment finance rates in Australia typically range from 5.5% to 15% per annum depending on the lender, your business profile, and the type of equipment being financed. Newer equipment from tier-one manufacturers generally attracts rates at the lower end, while used equipment or niche assets may sit higher due to depreciation and resale risk.

Beyond the interest rate, watch for establishment fees (typically 1% to 3% of the loan amount), monthly account-keeping fees ($10 to $30), and early repayment charges. Some lenders offer fee-free structures with a marginally higher rate — FundingCheck's comparison shows all-in costs so you can evaluate the true price rather than being drawn to a headline rate that hides fees.

For a practical example: a $100,000 chattel mortgage over 48 months at 8.5% p.a. with a 2% establishment fee results in monthly repayments of approximately $2,470 and total interest of around $18,500. Use our business loan calculator to model different scenarios for your specific equipment purchase.

Dealer finance is convenient but rarely the cheapest option. Equipment dealers earn commissions for placing finance, which means the rate you are offered may include a margin above what you would receive by approaching lenders directly. By comparing through FundingCheck, you see offers from lenders competing for your business — creating downward pressure on rates.

FundingCheck also gives you access to specialist equipment lenders that most business owners would never discover on their own. Beyond the big banks and well-known non-bank lenders, Australia has dozens of niche financiers focused on specific asset classes — commercial vehicles, medical equipment, hospitality fit-outs, agricultural machinery. Our panel includes these specialists alongside mainstream providers.

There is no cost to use FundingCheck's comparison service. We are paid by the lender you choose, not by you. Your initial qualification check does not affect your credit score, and you are under no obligation to proceed with any offer.