Equipment finance, structured around the asset and the business
Equipment finance is rarely a single product. It is a category — and the right structure depends on what you are buying, how the business uses it, and how the lender treats that asset class on its books. The question is not "what is the rate"; it is which lender's policy fits the equipment, the business and the way you want to own it at the end of the term. Get that right and the rate tends to follow.
The range of equipment that can be financed is wide. Heavy machinery for construction, civil contracting, mining, farming, demolition and landscaping — cranes, concrete plant, tippers. Earthmoving and excavation gear — excavators, loaders, graders, forklifts, piling and drilling machinery, trommel screens. General manufacturing across food and hospitality, glass, welding, packaging, plastics, printing, warehousing and conveying, waste and recycling, and woodworking. Engineering equipment such as lathes, boring and milling machines, grinding and drilling centres, gear cutting, shaping and press machines. Office fit-outs — copiers, furniture, IT and computers, boardroom and presentation equipment. Commercial kitchens for restaurants, cafes, franchises, microbreweries, pubs, bars and roasters. And specialist or transport assets including vehicles, fleet and vans, commercial kitchens, aircraft, heavy transport, and mining plant. Different lenders specialise in different asset classes, and the lender that is sharpest on excavators is often not the one that is sharpest on a kitchen fit-out.
Speed varies with the structure. Lower-doc facilities against an ABN can move quickly; the products with the keenest pricing and the better end-of-term features usually take a little longer to assess properly. Both can be the right answer — it depends on whether the priority is getting the asset working this week or getting the cleanest long-term cost.
Choosing the ownership structure
Most equipment and vehicle finance comes down to a handful of structures, and each carries different ownership, tax and balance-sheet consequences. This is general information — your accountant should confirm the treatment that suits your entity before you commit.
- Chattel mortgage. A loan to purchase an asset used predominantly for business. You own the asset from the outset; the financier takes security over it until the loan is repaid. Fixed repayments, terms commonly from 24 to 84 months, and a balloon (residual) payment can be set to reduce monthly outgoings, with a lump sum owing at the end of the term.
- Finance lease. The financier owns the asset and leases it back to you for an agreed term and rental. At the end you can typically pay out the residual to take ownership or extend the lease.
- Commercial hire purchase. The financier purchases the asset and you "hire" it for a fixed monthly fee, taking ownership once the agreement is complete.
- Novated lease. A three-way arrangement between employer, employee and financier, where the employer makes repayments from the employee's salary as part of a remuneration package. Terms commonly run 12 to 60 months.
- Self-employed and low-doc loans. A range of products exists for self-employed borrowers. Lending against an ABN with limited financials is possible in some cases — but reduced documentation is the part that most often complicates a self-employed application, so it pays to map it before you apply.
Which of these is right is a policy-and-tax question, not a default. The same excavator can sit on a chattel mortgage, a finance lease or a hire purchase, and the better choice depends on how your business accounts for the asset and what you want to happen at the end of the term.
Trucks, heavy vehicles and asset-backed lending
Heavy vehicle and equipment finance has its own policy logic. Lenders look hard at how long the business has traded, payment history on similar equipment, whether the applicant is asset-backed, and whether GST is paid and up to date. An applicant with limited history can still finance an asset where the business has traded two years in the same field, is buying through a dealer, holds twelve months of clean repayment history on comparable equipment, or is asset-backed.
The asset itself shapes the deal. Trucks bought through a dealer and through private sale can both be financed; the sharpest terms generally sit with newer assets, but older trucks — commonly up to around twelve years — can still be financed on workable terms. Refrigerated, tilt and tipper trucks, and the full range from six-tonne to twenty-four-tonne, all fit within facilitated loans, leases and rental agreements. The structure should match the working life of the asset, so the finance term and the asset's productive years line up rather than leaving you paying for plant you have already retired.
Some borrowers with established equity also weigh consolidating business and personal obligations by refinancing against home equity — sometimes lower in total monthly outgoings, but it moves unsecured or asset-secured debt onto the home, so it is a structural decision worth modelling carefully rather than assuming. Whether that helps or harms depends on your full position.
If you are setting up a new commercial kitchen, a mechanic's workshop, a manufacturing line or any other equipment-heavy operation, the worthwhile work is mapping the asset, the entity and the lender policy together — so the facility you sign today suits how the business will actually run. Book a strategy session and we will work through the structure that fits.
General information only — not personal financial product or credit advice. Lending is subject to each lender's policy, your full circumstances and responsible-lending assessment. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).