What Is Equipment Finance?
Equipment finance is a type of business loan used to purchase or lease commercial machinery, vehicles, tools, and technology. Instead of paying for expensive equipment upfront, which can drain working capital, you finance the purchase and repay it over time, typically from the income the equipment helps generate.
In Australia, equipment finance is available to businesses of all sizes, from sole traders buying a $30,000 trailer to large operators financing a $5 million fleet of yellow goods.
What Equipment Can Be Financed?
Almost any business-use asset can be financed. Common categories include:
Yellow Goods and Heavy Equipment
- Excavators and mini excavators
- Loaders and wheel loaders
- Bulldozers and graders
- Forklifts and telehandlers
- Cranes and lifting equipment
- Skid steers and compact track loaders
Commercial Vehicles and Transport
- Semi-trailers and B-doubles
- Tippers and dump trucks
- Refrigerated vehicles
- Buses and passenger vehicles
- Agricultural machinery (tractors, harvesters)
Trade and Business Equipment
- Manufacturing equipment and CNC machinery
- Restaurant and commercial kitchen equipment
- Medical and dental equipment
- IT equipment and technology
- Solar panels and energy systems
Mates In Finance arranges equipment finance from $30,000 up to $5 million through their panel of 45+ specialist lenders. Whether you need one excavator or an entire fleet, they can structure the right deal.
Types of Equipment Finance
There are several different structures for equipment finance, each with different ownership, tax, and cash flow implications:
Chattel Mortgage (Most Common)
You own the asset immediately, and the lender takes a mortgage over it as security. Once the loan is repaid, the mortgage is lifted and you own the equipment outright. You can claim depreciation and GST credits upfront if applicable. Most popular for business equipment purchases.
Finance Lease
The lender buys the equipment and leases it to you. You use it and make regular payments. At the end of the term, you typically have the option to purchase the asset at a residual value. The lender owns the asset during the lease term, which has different accounting treatment.
Operating Lease / Rental
The lender owns the equipment and you rent it for a set period. At the end, you return it. No ownership, but also no residual value risk. Useful for technology or equipment that depreciates quickly.
Hire Purchase
Similar to a chattel mortgage but with different legal ownership during the term. You hire the equipment while making payments, and ownership transfers at the end. Favoured in some industries due to accounting treatment.
How Much Does Equipment Finance Cost?
Interest rates for equipment finance vary depending on:
- The age and type of equipment (newer assets attract lower rates)
- Your ABN age and business history
- Your credit profile
- Loan term and amount
- Whether the loan is low-doc or full-doc
For ABN holders through Mates In Finance, rates typically range from 6% to 14% p.a. depending on these factors. Working with a broker who accesses 45+ lenders means the rate you get is genuinely competitive, not the single rate one bank has decided to offer you.
Getting Approved: What ABN Holders Need
One of the biggest misconceptions is that equipment finance requires extensive documentation. For ABN holders working through Mates In Finance, the requirements are often minimal:
- Active registered ABN (preferably 12+ months)
- Photo ID (driver's licence or passport)
- Rates Notice (council rates or water rates) as proof of address
- Description and quote for the equipment you want
Tax returns and full financial statements are not required. That's what makes this genuinely accessible to most ABN holders.
Hit these three criteria and you qualify for prime lender rates through major banks. This is the sweet spot for the most competitive equipment finance in Australia.
You can still get financed. Expect slightly higher rates, lending typically capped around $75,000, and some lenders may require a 20% deposit. Specialist non-bank lenders cover this gap well.
New vs Used Equipment: Does It Matter?
Yes, lenders treat new and used equipment differently:
- New equipment typically attracts lower interest rates and longer terms because it holds its value better and has no wear history
- Used equipment is absolutely financeable, but lenders may want a valuation or restrict the loan-to-value ratio depending on the asset's age
- Age limits vary by lender, some finance equipment up to 10–15 years old, others stop at 5–7 years
Adam at Mates In Finance knows which lenders are most flexible on used equipment and can match you to the right one based on what you're buying.
Tax Considerations for Equipment Finance
Equipment purchased through a chattel mortgage or hire purchase may be eligible for the ATO's instant asset write-off scheme, allowing you to deduct the full cost in the year of purchase (subject to current thresholds and eligibility). This can significantly reduce your taxable income in the year you buy.
Speak to your accountant about the most tax-effective structure for your situation before signing any finance agreement. The choice between a chattel mortgage, lease, or hire purchase can have meaningful tax and cash flow differences.
Free eligibility check at matesinfinance.com.au. Takes 2 minutes. No credit check. Or call Adam directly on 0484 137 550.