25 Mar Equipment Finance in Australia: Your Questions Answered
Everything you need to know about financing equipment for your business — from a broker based on the Gold Coast who’s settled over $100 million in commercial equipment finance for businesses across Brisbane, the Sunshine Coast, Toowoomba, and right around Australia.
Whether you’re buying your first truck, upgrading a CNC machine, or financing an entire fleet, chances are you’ve got questions. Here are the ones I get asked every day.
What is equipment finance?
Equipment finance is a way to buy business equipment without paying the full amount upfront. Instead of pulling $150,000 out of your business to buy a truck, you make regular repayments over a set term — usually 2 to 7 years — while you’re using the equipment to earn money.
The equipment itself is used as security for the loan, which means it’s generally easier to get approved than an unsecured business loan. It covers everything from trucks and excavators to CNC machines, commercial kitchen equipment, solar systems, and pretty much anything your business needs to operate.
How does equipment finance work?
The process is straightforward. You find the equipment you want to buy, apply for finance, get approved, and the lender pays the seller directly. You make repayments (usually monthly or weekly) over the agreed term, and at the end you own the equipment outright — or hand it back, depending on the structure you’ve chosen.
From start to finish, a typical deal looks like this:
You tell your broker what you’re buying and roughly what it costs. Your broker matches you with the right lender based on your situation. The lender assesses your application — this can take anywhere from a few hours to a few days. Once approved, contracts are signed and funds are released to the seller. You start making repayments and using the equipment.
The whole process can be as quick as 24 hours for straightforward deals, or a week or two for more complex situations.
What types of equipment can I finance?
Almost anything that’s used for business purposes. The most common ones I deal with are trucks, trailers, prime movers, excavators, loaders, dozers, forklifts, cranes, CNC machines, commercial vehicles, agricultural equipment, medical equipment, commercial kitchen gear, printing equipment, and workshop fitouts.
If it’s a tangible asset that your business uses to generate income, there’s a good chance it can be financed. Some of the more unusual things I’ve helped finance include skip bins, dental chairs, gym equipment, and industrial pizza ovens. If you’re not sure whether your equipment qualifies, just ask.
What credit score do I need for equipment finance?
There’s no single magic number. Different lenders have different appetites. The major banks want clean credit and a solid trading history. But there are specialist lenders who work with businesses that have had credit issues in the past — defaults, judgements, even past bankruptcies.
The key difference is that equipment finance is secured against the asset, which gives lenders more comfort than an unsecured loan. So even if your credit isn’t perfect, the fact that there’s a physical asset backing the loan means there are often options available.
This is where using a broker matters. A broker knows which lenders will look at your situation without wasting your time on applications that won’t get up.
What interest rates can I expect?
It depends. I know that’s not the answer you want, but it genuinely varies based on your business profile, the age and type of equipment, the loan amount, and the lender.
As a rough guide in 2026, established businesses with good credit are typically looking at rates between 6% and 9%. Newer businesses or those with some credit history issues might see rates from 9% to 14% or higher. The age of the equipment matters too — financing a brand new truck from a dealer will attract a better rate than a 15-year-old excavator from a private seller.
The best way to find out your actual rate is to have a broker run a soft enquiry across their panel. This doesn’t affect your credit score and gives you a real picture of what’s available.
Can I get equipment finance if the bank said no?
Yes. This is probably the most common situation I deal with. Someone goes to their bank, gets knocked back, and assumes that’s the end of the road. It’s not.
Banks have strict lending criteria and a narrow view of what they’ll finance. But there are dozens of specialist commercial equipment lenders in Australia that only deal through brokers. They’re set up specifically for the deals that banks won’t touch — startups, older equipment, complex business structures, credit blemishes.
I’ve settled finance for businesses that had been knocked back by three different banks. The equipment was fine, the business was making money, the bank just couldn’t fit it into their policy. A specialist lender picked it up and had it approved within 48 hours.
How long does approval take?
For a straightforward deal with a strong applicant and standard equipment, same-day approval is possible. Some lenders can give you a conditional approval within a couple of hours.
For more complex situations — startups, larger amounts, older equipment, or applicants with credit issues — it typically takes 2 to 5 business days. The main things that slow it down are waiting for documents from the applicant and the lender needing to verify financials.
Either way, your broker should be keeping you in the loop the whole time so you know exactly where things are at. You should never be left wondering what’s happening with your application.
Do I need a deposit?
Not always. Many lenders offer 100% finance for the purchase price, especially for new equipment from a dealer. Some even finance on-road costs, delivery, and installation.
That said, putting some money down can improve your chances of approval and get you a better rate. If your credit isn’t perfect or the equipment is older, a deposit shows the lender you’ve got skin in the game and reduces their risk.
There’s no one-size-fits-all answer here. It depends on the deal.
Can I finance used or second-hand equipment?
Yes. A huge portion of what I finance is used equipment. The key factors are the age of the equipment, its condition, and who you’re buying it from.
Most lenders will finance used equipment up to about 15 to 20 years old, depending on the asset type. Trucks and earthmoving equipment generally have longer finance windows because they hold their value well. Some specialist lenders will even look at equipment older than that on a case-by-case basis.
Buying from a dealer is simpler because title and ownership are straightforward. Private sales are fine too, but the lender will usually want to verify ownership and make sure there’s no money owing on the asset.
What’s the difference between a chattel mortgage and a finance lease?
These are the two most common equipment finance structures in Australia. They work differently and have different tax implications.
A chattel mortgage is essentially a loan. You own the equipment from day one, and the lender takes a mortgage over it as security. You claim depreciation and the interest portion of your repayments as tax deductions. If you’re registered for GST, you can claim the GST upfront on the purchase price. This is the most popular option for businesses that want to own their equipment and maximise tax benefits.
A finance lease is a rental agreement. The lender owns the equipment and leases it to you for a fixed term. Your lease payments are generally fully tax deductible as a business expense. At the end of the lease, you can usually buy the equipment for a pre-agreed residual value, extend the lease, or hand it back. This option suits businesses that want to upgrade equipment regularly or prefer to keep the asset off their balance sheet.
Your accountant can advise which structure is better for your specific tax situation.
Is there a cost to use a finance broker?
No. In most cases, the broker is paid a commission by the lender — not by you. So you get access to 60+ lenders, expert advice, and someone to manage the whole process, and it doesn’t cost you a cent.
The rate you get through a broker is the same as (or often better than) what you’d get going direct to the lender, because brokers write volume and have negotiating power that individual applicants don’t.
What documents do I need to apply?
For a standard application, you’ll typically need your driver’s licence, two to three months of business bank statements, and details of the equipment you’re buying (invoice or quote from the seller).
For larger amounts — generally over $150,000 — lenders may also ask for your last two years of financial statements (prepared by your accountant) and recent BAS statements.
Some lenders offer low-doc options for smaller amounts, where a simple self-declaration of income is enough. Your broker will tell you exactly what’s needed based on the lender and the deal.
Can I get equipment finance as a startup or new business?
Yes, but the options are different. Most banks want to see at least 2 years of trading history, which rules out brand new businesses. But there are lenders that specialise in startup finance.
They’ll typically want to see industry experience (even if the business is new, you’ve been in the trade for years), some savings or a deposit, a clear plan for how the equipment will generate income, and a clean personal credit history.
First truck operators, tradies going out on their own, and new businesses with experienced operators are all situations I deal with regularly. It’s absolutely possible — you just need the right lender.
What is the instant asset write-off?
The instant asset write-off allows eligible businesses to claim an immediate tax deduction for the full cost of eligible assets purchased and used (or installed ready for use) in that financial year. Instead of depreciating the asset over several years, you write off the entire amount in one hit.
The threshold and eligibility change regularly, so check with your accountant or the ATO website for the current rules before making purchasing decisions based on this. As of 2026, the $20,000 instant asset write-off threshold applies for small businesses with an aggregated turnover of less than $10 million.
Even if your purchase is above the instant write-off threshold, you can still claim accelerated depreciation under other provisions. Again — talk to your accountant. This is where a good accountant and a good broker working together can save you serious money.
Can I finance a truck with bad credit?
Yes. Truck finance with adverse credit is one of the most common things I arrange. The transport industry is full of operators who’ve had a rough patch — maybe a customer went under and left them with unpaid invoices, or they hit a slow period and fell behind on some payments.
Specialist lenders understand this. They look at the whole picture — your current income, the value of the truck, how long ago the credit issues were, and what’s changed since then. The rates will be higher than someone with perfect credit, but the finance is available.
The worst thing you can do is apply everywhere yourself. Every declined application hits your credit file and makes the next one harder. Talk to a broker first. They’ll tell you which lenders will look at your situation before lodging any applications.
How does a broker compare to going direct to a bank?
When you go to a bank, you get access to that bank’s products and that bank’s policies. If you don’t fit, you get a no. Then you go to the next bank, apply again, and hope for a different answer.
When you use a broker, you get access to dozens of lenders in one conversation. The broker knows which lenders are best for your situation, submits your application to the right one first time, and negotiates on your behalf. One application, multiple options.
Brokers also handle all the paperwork, chase up the lender for you, and manage the settlement process. You deal with one person instead of navigating a bank’s call centre.
The rate is the same or better, the process is faster, and the approval rate is higher because the broker knows where to place the deal. There’s no downside.
What happens if I can’t make my repayments?
If you’re struggling with repayments, the worst thing you can do is ignore it. Contact your broker or lender as early as possible. Most lenders have hardship provisions and will work with you — restructuring repayments, offering a temporary pause, or extending the term to reduce the payment amount.
The equipment is security for the loan, so if repayments aren’t made for an extended period, the lender can repossess the asset. But it rarely gets to that point if you communicate early. Lenders don’t want to repossess equipment — they want to get paid. They’ll usually find a way to make it work.
Can I refinance existing equipment finance?
Yes. If your circumstances have improved since you took out the original finance — your credit is better, your business has grown, or interest rates have moved — refinancing can potentially reduce your repayments or free up cash.
Refinancing involves taking out a new loan to pay off the existing one, ideally at a lower rate or better terms. Your broker can assess whether it makes sense based on any break costs, the remaining term, and what rates are currently available.
What’s the difference between fixed and variable rates?
Most equipment finance in Australia is done on a fixed rate. This means your repayment amount stays the same for the entire term of the loan, which makes budgeting simple and predictable.
Variable rates move up and down with the market. They can be lower initially, but there’s a risk they’ll increase over the term. For business equipment, fixed rates are almost always the better choice because you know exactly what you’re paying from day one.
How do I choose the right finance structure?
It comes down to three things: how you want to own the equipment, your tax situation, and your cash flow.
If you want to own it outright and maximise depreciation deductions, a chattel mortgage is usually the way to go. If you want lower repayments and plan to upgrade regularly, a finance lease might suit better. If you want the flexibility to walk away at the end, an operating lease is worth considering.
The best advice I can give is to talk to both your broker and your accountant before signing anything. Your broker handles the finance side, your accountant handles the tax side, and between them you’ll get the right structure for your business.
Ready to get started?
If you’ve got a question that’s not covered here, or you want to talk through your specific situation, get in touch. No cost, no obligation, and no judgement — whatever your credit history or business situation, there’s usually a way to get it sorted.
Chris Pyne
Forefront Equipment Finance
0402 982 928
chris@forefrontfinance.com.au
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