Equipment finance for machinery, plant and tools

Equipment finance funds the plant and machinery a business depends on, such as earthmoving gear, manufacturing lines, agricultural machinery, medical and workshop equipment. The asset itself secures the loan, most commonly under a chattel mortgage.

Lenders classify equipment by how readily it can be resold. Wheeled and tracked assets with strong secondary markets are the easiest to finance. Specialised or fixed plant needs a lender who is comfortable with that industry, which is why a wide panel helps.

New, used, dealer, auction and private purchases can all be funded, with terms usually between one and seven years.

Equipment earns money over years, and financing lines the cost up with the income it produces. Working capital stays in the business for materials, wages and growth.

A chattel mortgage may allow upfront GST credit and deductions for interest and depreciation, subject to your structure. Confirm with your accountant.

Financing also makes upgrading easier. When a machine reaches the end of its working life, a sensible balloon means replacement is something you planned for rather than a sudden demand on cash.

Match the loan term to how long you'll actually use the machine, not the longest term the lender will offer. When you sell or trade it in, any finance still owing has to be paid out as part of that sale.

Use a lender who actually knows the asset. Yellow goods, agricultural machinery and specialised plant each have lenders who understand that market and lenders who do not. The ones who do tend to approve faster and value the equipment more accurately.

If you are buying used or at auction, speak to your broker before you bid. The valuation and the settlement can then be ready by the time you win it.

One enquiry compares equipment lenders across the lender panel. Your broker shortlists lenders that actively fund your industry and asset type, then runs the application, valuation and settlement.

Have your ABN details, financials or bank statements, and the equipment details ready. Pre-approval is possible the same day for many straightforward applications, and there are low-doc options for businesses without current financials.

Buy based on what the machine earns you each week versus what it costs you each week, including the finance repayment.

Don't rule out used equipment with a good service history. There are lenders who'll fund it, and the numbers often stack up better than buying new.

Talk to your accountant early about how depreciation will work for the purchase. Keep your paperwork up to date too, so you are not ruling out lenders without realising it.