Equipment Finance
Machinery Finance: New, Used and Private Sale
By Joseph Nowland, Director and Senior Finance Broker · 18 July 2026 · 4 min read
Last reviewed 26 July 2026
How does machinery finance work?
Machinery is the heartland of equipment finance. Earthmoving gear, tractors and agricultural implements, forklifts, cranes, access equipment and manufacturing plant all sit in this territory. The business borrows against the machine, owns it from settlement under the usual chattel mortgage structure, and repays over a term matched to the machine's working life.
Lenders like machinery because it holds value and sells readily secondhand. A mid-life excavator from a recognised brand has a ready market and predictable pricing, which makes the security side of the loan easy to assess. That lender appetite is why machinery finance reaches deep into used and private-sale territory that softer assets cannot.
How do lenders treat new machinery?
New machines make the cleanest file a lender ever sees. The value is known, the warranty is full, the dealer stands behind the gear and there is no history to question. Nearly every equipment lender competes for the business, which gives you the widest choice of structures, terms and balloons. Attachments, delivery and installation can usually ride inside the funded amount when they are on the invoice.
The finance risk on new gear is not approval, it is sizing. New machinery carries its steepest depreciation early, so a loan at full price on a long term can sit above the machine's resale value for a stretch. A deposit, a trade-in or a sensible term keeps the debt tracking under the machine's value, which keeps every exit open if plans change.
What about used machinery?
Used gear is where value lives, and lenders assess it on age, hours, condition and price against the market. Age caps typically apply at the end of the term, so older machines support shorter terms with mainstream lenders and individual assessment with specialists. Hours and service history matter the way kilometres do on a truck, and a high-hour machine with documented servicing can read better than a low-hour one with none.
The spread between lender policies is wide on used machinery, wider than most borrowers expect. The same ten-year-old loader can be a decline at one desk and a comfortable approval at another, purely on asset policy. That makes placement the main skill, and it is exactly the ground covered in our guide on financing used and auction equipment.
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Get my quoteCan you finance machinery from a private seller?
Yes, and a lot of good machinery changes hands this way, particularly in agriculture and earthmoving. The finance adds a layer of verification. The seller's identity and ownership get checked, the machine's serial numbers are confirmed, an encumbrance search runs on the Personal Property Securities Register, and payment goes directly to the seller at settlement with any existing finance paid out first.
An independent inspection earns its keep on private machinery deals. Machines hide wear that photographs flatter, and an hour with a mechanic or a dealer report is cheap against a bad purchase. Allow a few extra days over a dealer purchase for the checks to run. Organised sellers with their paperwork ready shorten the wait considerably.
What structures and terms suit machinery?
Chattel mortgage for ownership, with terms commonly three to seven years matched to the machine's earning life. Balloons are useful on machinery with strong residual values, provided they are sized against what the machine will actually fetch when the balloon lands. Seasonal repayment shaping fits agricultural and project-based work, detailed in our seasonal repayments guide.
The term discipline is the same here as everywhere in equipment lending. A machine should still be earning competitively when its last repayment lands. Test scenarios on the equipment finance calculator with realistic numbers for how much the machine will work, and let the machine's working life set the ceiling rather than the repayment you would prefer.
How do you apply and place the deal well?
Assemble the usual commercial file of identification, ABN details and income evidence or its low-doc alternatives, then add the machine's make, model, year, hours and serial numbers once it is identified. Pre-approval before you commit matters double on used gear, where good machines sell to the buyer whose money is organised.
Then place the application once, with a lender whose asset policy fits the machine's age and type, rather than testing the market with your credit file. One enquiry with Morella Finance compares machinery lenders across the panel, specialists included, and manages private-sale settlement end to end.
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This guide is general information, not financial or credit advice. Consider your circumstances and check details with your broker or accountant.
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