The asset is the security
Equipment finance
Fund the machine, the truck or the fit-out using the asset itself as security. Lower rates and longer terms than unsecured lending.
Equipment Finance at a glance
- Amount
- $10,000 to $2,000,000
- Term
- 12 to 60 months, and up to 84 months on some heavy plant
- Security
- The equipment itself, registered on the PPSR. Property security is not usually required.
- Time to funding
- 1 to 5 business days from a supplier invoice. Private sales and imports take longer.
- Typical use
- Excavators, tippers, CNC machines, commercial kitchens, dental chairs, forklifts, IT fit-outs
- What you'll need
- A supplier quote or tax invoice, ABN, Australian photo ID, and 6 months of bank statements
What it is
What is equipment finance?
Equipment finance is a loan secured by the thing you are buying. The lender registers an interest against the asset on the PPSR, which means they have something to recover if the loan fails. That security is why the rate is lower and the term is longer than an unsecured loan for the same amount.
Three structures do most of the work in Australia: a chattel mortgage, a finance lease and a commercial hire purchase. They differ on who owns the asset, when you claim the GST, and how it lands on your balance sheet. The repayments can look almost identical while the tax outcome is very different, so that decision belongs to your accountant, not to the equipment salesperson. Most lenders will fund 100% of the invoice for an established business, including delivery and installation.
Worked example
A worked example
- A civil contractor buys a $120,000 excavator, GST inclusive, on a chattel mortgage over 60 months with a 20% balloon.
- The balloon is $24,000, payable at the end of month 60.
- At an indicative 9% p.a. the monthly repayment is about $2,173.
- The $10,909 of GST inside the purchase price is claimed back on the next BAS.
- If the machine bills out at $140 an hour, the repayment is covered by roughly 16 hours of work a month.
Rounded. GST timing and deductions depend on your entity - confirm both with your accountant before you sign.
Is this right for you?
Is equipment finance right for you?
Good fit if…
- The asset earns money. A machine that bills hours is the easiest thing in commercial finance to fund.
- You have a supplier quote or tax invoice ready, which is what starts the process.
- You want to keep your working capital and your overdraft free for wages and stock.
- You want the GST back on your next BAS rather than tied up in a cash purchase.
Probably not if…
- You need the money for wages, stock or a tax bill. That is not equipment finance - look at an unsecured loan.
- The asset is very old or very specialised with no resale market. Lenders lend against what they can sell.
- You cannot produce a quote or invoice yet. Nothing moves until the lender knows exactly what they are securing.
- You have not asked your accountant which structure suits your entity. Signing first and asking later is how businesses end up with the wrong GST treatment.
What it costs
What equipment finance costs
Secured lending prices better than unsecured. The asset type moves the number as much as your credit file.
- Interest rate
- Our panel prices business finance between 6% and 20% p.a. Equipment finance generally sits in the lower half of that band, because the lender holds security. New assets from a dealer price better than old assets from a private seller.
- Establishment fee
- A one-off documentation or origination fee is charged at settlement and can usually be added to the amount financed. It runs $395 to $995 on a standard facility, and 1% to 1.5% of the amount financed on larger ones.
- Ongoing fees
- A small monthly account fee is common. PPSR registration is charged at cost. The account fee is usually $4.95 to $9.95 a month, and PPSR registration is passed through at $6 to $15 depending on the registration period.
- Paying it out early
- These are fixed rate contracts, so an early payout is a break figure rather than the remaining balance. Get a payout quote before you commit to selling or upgrading. Most of the panel discounts the rentals still to run back to present value, and some add a break fee of one to two months' repayments.
Bizzloans is a broker, not a lender. The lender that funds your deal pays us a commission, which we disclose to you. You pay us nothing to compare.
Eligibility
Who can apply
- A valid ABN
- Current Australian photo ID
- In business more than 6 months
- Monthly turnover above $6,000
- Bad credit considered
- A supplier quote or tax invoice for the asset
Don’t meet these? Call us — we have lenders for most situations, and we’ll tell you straight if we don’t.
Book a callWhat you'll need
What you’ll need
No documents
To get a quote
- Nothing formal. The asset, the price and your trading history is enough for indicative numbers.
Once you pick a lender
To settle
- The supplier's tax invoice, made out to your entity, with the serial or VIN
- Your ABN and a current Australian photo ID for each director
- 6 months of business bank statements
- An asset schedule and, for larger amounts, financials or a BAS
- For private sales: a PPSR clearance and the seller's identity and bank details
How it works
How it works
Same day
Send us the quote
The supplier quote or invoice tells us the asset, the age, the price and the seller type. Those four things decide which lenders will look at it and at what rate.
1 to 2 business days
Pick the structure with your accountant
Chattel mortgage, finance lease or hire purchase, and the balloon if you want one. We put the numbers in front of your accountant so the decision is made on tax, not on the monthly repayment.
1 to 5 business days
Settle direct with the supplier
The lender pays the supplier, registers on the PPSR, and you collect the asset. Private sales add a few days for the encumbrance check and seller verification.
This vs the alternative
Chattel mortgage vs finance lease vs hire purchase
The repayments can look nearly identical. What changes is who owns the asset, when you claim GST, and what your accountant can deduct.
| Chattel mortgage | Finance lease | Commercial hire purchase | |
|---|---|---|---|
| Who owns the asset during the term | You do, from day one. The lender registers a security interest on the PPSR. | The lender owns it. You are renting it. | The lender owns it until the final payment is made. |
| Who owns it at the end | You, once the loan and any balloon are paid out. | You pay the residual, re-lease it, or hand it back. | Title passes to you automatically with the last payment. |
| GST | Claimed on the full purchase price on your next BAS. | GST is charged on each rental payment and claimed as you go. | Claimed up front on the cash price, as with a chattel mortgage. |
| Balance sheet | Asset and liability both sit on your books. | Recognised as a lease - the treatment depends on the standard your entity reports under. | Asset and liability both sit on your books. |
| Who it suits | Most businesses buying an asset they intend to keep. The default choice. | Businesses that want to hand equipment back and upgrade - IT, fit-outs, fast-obsolescing gear. | Businesses wanting ownership at the end under an older structure. |
General information, not tax advice. Your accountant should pick the structure before you sign.
Balloon payments, without the sales pitch
A balloon - sometimes called a residual - is a slice of the loan pushed to the end of the term. Set a 30% balloon on a $100,000 machine and you amortise $70,000 across the term, then owe $30,000 in the final month.
It lowers the monthly repayment. It does not lower what the finance costs you. You carry interest on that final chunk for the whole term, so the total paid goes up, not down.
- Balloons commonly sit between 0% and 30% of the purchase price, and the maximum usually falls as the term gets longer. Across the panel that is about 30% at 36 months, 20% at 48 and 10% at 60.
- When it falls due you pay it out, refinance it, or sell the asset and settle from the proceeds.
- The risk worth naming: if the asset is worth less than the balloon at the end of the term, you cover the gap yourself.
- Rule of thumb - set the balloon at or below what the asset will honestly be worth second-hand on the day it falls due.
What lenders check on used and private-sale equipment
- Age at the end of the term, not age today. A 10-year-old machine on a 5-year term is assessed as a 15-year-old machine.
- A PPSR search confirming the seller owns it and no finance is still registered against it.
- For private sales, the lender pays the seller directly once the encumbrance check clears. Never pay a private seller yourself before that happens.
FAQ
Equipment Finance questions
What is a chattel mortgage?
Can I finance second-hand equipment?
Do I need a deposit?
Can I include delivery and installation?
How does the GST work?
Can I finance equipment I already own?
Do I need financials?
What happens at the end of the term?
A person reads this, not a scoring engine
A named advisor takes your file to the lenders on the panel that fund your industry and your turnover — and tells you plainly when equipment finance is the wrong answer and what to use instead.
Ready when you are
Compare Equipment Finance today
Comparing is free, you’re never locked in, and checking won’t affect your credit score. If we can’t help, we’ll tell you that too.
