Quick answer
Equipment finance funds machinery, tools, vehicles and fit-outs, with the equipment itself usually acting as security. Because the lender can rely partly on the asset, equipment finance is often available to newer businesses and owners with credit issues who struggle to get unsecured loans. Terms are usually matched to the working life of the equipment.
Key points
- The equipment usually secures the finance
- Often accessible to new ABNs and credit-impaired owners
- Terms matched to the useful life of the asset
- New and used equipment can both be financed
Why equipment is easier to fund
When a lender can point to a specific asset, the risk changes. If the loan is not repaid, the equipment can be recovered and sold. That security is why equipment finance is one of the most accessible forms of business credit for young businesses and owners with imperfect files, and why it is usually cheaper than unsecured borrowing.
What can be financed
| Category | Examples |
|---|---|
| Construction and earthmoving | Excavators, skid steers, compactors, scaffolding |
| Workshop and manufacturing | CNC machines, laser cutters, presses, compressors |
| Hospitality and food | Espresso machines, ovens, coolrooms, fit-outs |
| Medical and allied health | Imaging, dental chairs, treatment equipment |
| Transport | Trucks, trailers, forklifts |
| Office and technology | Servers, specialised software and hardware |
Structures, briefly
- Equipment loan: you own the asset from day one and the lender takes security over it.
- Finance lease: the lender owns the asset and you lease it, often with a residual at the end.
- Rental or operating lease: you use the asset for a period and hand it back.
The right choice depends on tax, cash flow and whether you want the asset long term. business.gov.au has a helpful comparison, and your accountant can advise on depreciation and any instant asset write-off that applies.
When equipment alone is not enough
Lenders may want a deposit, especially for used, specialised or ageing equipment, or for businesses with serious credit problems. If you do not have the cash, property equity can provide it, or fund the whole purchase. A property-secured loan from as little as $20,000 up to $5,000,000 can also cover mixed purchases, such as several pieces of second-hand gear plus installation, which asset lenders sometimes find awkward. See secured business loans.
Make the numbers work first
Before committing, check the equipment will pay for itself: extra jobs it allows, labour it saves, or costs it cuts. Then check the repayments using the repayment calculator. Our guide on cash, loan or lease walks through the decision.
An illustrative example
A landscaping business that started eighteen months ago wins a large council maintenance contract that needs a compact excavator and a tipper trailer. The owner’s unsecured options are limited because the business is young and a personal default from an old phone account still shows on file.
Equipment finance funds the machinery, with the equipment itself as the main security and a modest deposit. The contract income covers the repayments with room to spare. Because the default is old and explained, and the equipment holds its value, the lender is comfortable.
Buying second-hand
Used equipment can be excellent value, but lenders look harder at it. Expect questions about age, hours, condition, where it is being bought from and whether there is any existing finance owing on it. For private sales, a search of the Personal Property Securities Register confirms the seller owns the equipment outright. A dealer invoice and service history make approval smoother.
Talk about the gear you need
Make a quick enquiry with the equipment, its cost and whether it is new or used. No credit check to ask, a person checks it, and we keep it confidential. Get equipment finance options.
Frequently asked questions
Can I finance used equipment?
Often, yes. Lenders consider age, condition and resale value. Very old or highly specialised items can be harder, and private sales need extra checks on ownership.
Is a lease better than a loan?
It depends on tax position, cash flow and whether you want to own the asset. Talk to your accountant about the tax treatment of each option.
Can I finance equipment with an ATO debt?
Sometimes. Lenders consider whether the debt is on a plan and how the business is trading. Property security can help if the equipment alone is not enough.
What is registered on the PPSR?
Lenders usually register their interest in financed equipment on the Personal Property Securities Register, which protects them if the business fails.
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