Equipment and vehicle finance
Equipment is rarely the constraint on a business. Cash is. The frustration most owners run into is not whether they need the truck, the dental chair or the production line — it is that paying for it outright drains the working capital that keeps the business running day to day. Equipment and vehicle finance exists to separate those two things: it lets you put an income-producing asset to work now and pay for it over the time it earns, rather than from cash you cannot spare.
That applies across the whole spread of business assets — a prime mover for a transport operator, specialised medical or dental equipment for a private practice, kitchen and refrigeration gear, engineering machinery, IT and office fit-out, commercial vehicles. The asset funds the growth; the structure decides how cleanly it does so. The useful question is not "can my business get equipment finance" — most can. It is which facility structure, which lender and which tax treatment actually fit how your business is set up.
How the structures differ — and why it matters
Equipment and vehicle finance is available through a wide range of banks and specialist asset-finance lenders, and the differences between the products are not cosmetic. Each one places ownership, security and the tax treatment in a different spot, and that spot is what determines whether a facility helps or hinders your position. The four most common structures:
- Chattel mortgage. You own the asset from day one, and the lender holds a charge over it as security until the final repayment is made. Because the asset is yours from the outset, a GST-registered business can generally claim the GST on the purchase price in the next Business Activity Statement, and depreciation and interest are typically treated as business deductions. This is the workhorse structure for most owner-operators.
- Commercial hire purchase. The lender buys the asset and you hire it, building equity with each repayment until ownership passes to you at the end of the term. The asset itself acts as the security, which leaves your other property unencumbered for other financing.
- Finance lease. The lender owns the asset and you rent it for as long as you need it. There is no upfront capital outlay and no ownership obligation, which suits assets you would rather not hold on the balance sheet.
- Novated lease. A three-way arrangement between an employee, their employer and the financier. The employee takes the lease on a vehicle, and the employer agrees to take on the repayment obligations as part of the employee's remuneration — typically from pre-tax salary.
Which of these reads best for your business is a question of your accounting and tax position, not a single "lowest rate" answer. The right call here is usually made alongside your accountant, because the structure interacts with your GST, depreciation and BAS position in ways that outlast the loan itself.
Rates, terms and what qualifies
Most equipment finance carries a fixed interest rate over a set term with regular monthly repayments. That fixed, known repayment is part of the point: it makes the cost predictable, which makes budgeting and forward planning far easier than a moving target. Terms generally run from around twelve months to seven years, and matching the term to the working life of the asset is one of the levers worth getting right — financing a five-year asset over seven years quietly costs more than it needs to.
Qualifying is broader than many owners expect. Start-ups and businesses with a less-than-perfect credit profile can often still be placed, because asset finance is secured by the asset itself and lenders assess it on that basis. For smaller facilities the application can be light — typically your driver licence number, the equipment details, your business ABN, and the BSB and account number of your main business account. Larger facilities usually call for more: recent bank statements, a list of assets and liabilities, and a profit-and-loss statement, so the lender can read the health of the business and size repayments it can carry without strain.
Two practical points carry across most facilities. Lenders generally require the financed vehicle or equipment to be covered by a valid insurance policy for the term — finance is rarely advanced on an uninsured asset. And before signing, read the product documents for the full fee picture: establishment fees, ongoing monthly or annual charges, late-payment fees, and any cost for paying the facility out early. The headline rate is only part of what the facility actually costs over its life.
Structuring it so it serves the business
With this many product types, lenders and potential tax treatments, the genuine risk is not being declined — it is taking on the wrong structure, or more finance than the business can comfortably repay. The discipline is to size the facility against real cash flow, match the term to the asset, and choose the structure for how it sits with your tax position rather than for the rate alone. That last part is best mapped with your accountant, whose advice on GST, depreciation and deductibility should drive the choice of structure.
If you are looking to fund equipment or vehicles and want the facility built so it strengthens the business rather than just adding a repayment, it is worth mapping properly — which structure fits, which lenders suit the asset, and how to keep the cash-flow impact clean. Book a strategy session and we will work through the options against where your business actually stands.
General information only — not personal financial product or credit advice. Equipment and vehicle finance is subject to each lender's policy, your full circumstances and responsible-lending assessment, and tax treatment depends on your situation — confirm GST, depreciation and deductibility with your accountant. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).