Equipment Finance
Equipment Finance is a business funding pathway for Australian SMEs. It may suit businesses with a clear use of funds, current trading evidence and a realistic repayment source. It may not suit businesses using debt to cover unresolved losses or applying without documents.
Equipment finance can help a business fund productive assets without draining the working-capital buffer. For many SMEs, equipment is not a luxury. It is the thing that lets the business do more work, finish jobs faster, reduce labour, replace unreliable tools or open a new revenue stream. But buying equipment outright can create a cash-flow problem. The asset may generate revenue later, while the cost hits now. Equipment finance may help match the cost of an asset to the period in which the asset helps the business earn.
What is equipment finance?
Equipment finance is funding linked to a business asset.
The asset might be machinery, plant, tools, computers, commercial kitchen equipment, medical devices, refrigeration, forklifts, trailers, manufacturing equipment, construction equipment or other items used to operate or grow the business.
Unlike general working-capital finance, equipment finance is usually tied to the asset being purchased or leased.
The lender may use the asset as security. If repayments are not made, the lender may have rights over the asset depending on the structure.
Assets commonly funded
Equipment finance may be used for:
The asset should have a clear business purpose. Lenders may be more comfortable when the equipment is essential to revenue, productivity or delivery.
- ✓ excavators, loaders and construction machinery
- ✓ tools and trade equipment
- ✓ commercial kitchen equipment
- ✓ coffee machines and hospitality equipment
- ✓ medical, dental or allied-health equipment
- ✓ manufacturing machinery
- ✓ forklifts and warehouse equipment
- ✓ trucks, vans, utes and trailers
- ✓ agricultural equipment
- ✓ IT hardware
Compare business loan rates and lenders in Australia
Filter by product, amount and security type to narrow suitable options.
Product type
| Lender | Product | Rate from | Amount | Term | Speed | Compare |
|---|---|---|---|---|---|---|
| BOQ | BOQ Business Loan Established SMEs with strong financials | 7.50% | $20,000 - $250,000 | 1-7 years | 2-5 business days | Compare now |
| Moneytech | Moneytech Equipment & Asset Finance Higher-ticket equipment and vehicles | 7.99% - 9.56% | $25,000 - $2,000,000 | 1-7 years | 24-72 hours | Compare now |
| CommBank | CommBank BetterBusiness Loan Bank pathway with relationship banking | 8.15% - 14.25% | $10,000 - $500,000 | 1-7 years | 2-6 business days | Compare now |
| NAB | NAB Business Options Loan SMEs wanting bank-backed facilities | 8.20% - 14.40% | $10,000 - $1,000,000 | 1-7 years | 3-7 business days | Compare now |
| ANZ | ANZ Business Loan Established SMEs with stronger docs | 8.35% - 14.75% | $20,000 - $1,000,000 | 1-7 years | 3-7 business days | Compare now |
| Judo Bank | Judo Business Loan Larger SME growth and acquisition loans | 8.50% - 13.95% | $100,000 - $3,000,000 | 1-10 years | 3-10 business days | Compare now |
BOQ
BOQ Business Loan
7.50%
$20,000 - $250,000 • 1-7 years
2-5 business days
Best for: Established SMEs with strong financials
Compare nowMoneytech
Moneytech Equipment & Asset Finance
7.99% - 9.56%
$25,000 - $2,000,000 • 1-7 years
24-72 hours
Best for: Higher-ticket equipment and vehicles
Compare nowCommBank
CommBank BetterBusiness Loan
8.15% - 14.25%
$10,000 - $500,000 • 1-7 years
2-6 business days
Best for: Bank pathway with relationship banking
Compare nowNAB
NAB Business Options Loan
8.20% - 14.40%
$10,000 - $1,000,000 • 1-7 years
3-7 business days
Best for: SMEs wanting bank-backed facilities
Compare nowANZ
ANZ Business Loan
8.35% - 14.75%
$20,000 - $1,000,000 • 1-7 years
3-7 business days
Best for: Established SMEs with stronger docs
Compare nowJudo Bank
Judo Business Loan
8.50% - 13.95%
$100,000 - $3,000,000 • 1-10 years
3-10 business days
Best for: Larger SME growth and acquisition loans
Compare nowRates shown are publicly advertised starting rates and ranges where available. Your actual rate depends on lender assessment, security, turnover, time in business, credit profile and loan structure. Updated 10 May 2026.
Lease vs buy
Business.gov.au explains that businesses may often choose whether to lease or buy vehicles and equipment. Leasing means the business rents the asset from a leasing company. Buying means the business pays for and owns it outright, sometimes using a loan if there is not enough cash upfront.
Leasing:
Leasing may involve lower upfront cost and easier upgrades. It may suit equipment that changes often or becomes outdated. However, there may be restrictions on modification, use, repair processes or early termination.
Buying with finance:
Buying with finance may mean the business owns the asset, or will own it after repayments depending on structure. Ownership can allow modification and potential resale, but the business carries depreciation, maintenance and asset-risk considerations.
Buying outright:
Buying outright avoids loan repayments, but can drain cash. The key question is not only whether the business can afford the equipment today. It is whether the business can afford the reduced cash buffer after purchase.
Common structures
Equipment finance can be structured in several ways. Exact terms vary by lender and product.
Chattel mortgage:
A chattel mortgage is commonly used for business assets. The business owns the asset and the lender takes security over it until the loan is repaid.
Finance lease:
A finance lease allows the business to use the asset while the lender or financier owns it during the lease term. There may be residual value or end-of-term options.
Hire purchase:
Hire purchase generally means the business hires the asset and becomes owner after completing the required payments.
Operating lease:
An operating lease may suit assets the business wants to use rather than own long term. End-of-term return or upgrade options may apply.
Tax and accounting treatment can differ, so the site should always include an accountant caveat.
Deposit, term and balloon payments
Three variables often shape equipment finance affordability.
Deposit:
A larger deposit may reduce repayments but uses cash upfront. A lower deposit may preserve cash but increase repayments or total cost.
Term:
A longer term may reduce each repayment but increase total interest. A shorter term may reduce total cost but increase cash-flow pressure.
Balloon or residual:
A balloon payment is a larger final payment. It can lower regular repayments but creates a future obligation. It may suit some businesses, but it should not be ignored.
Ask:
- ✓ Will the asset still be useful when the balloon is due?
- ✓ Will resale value cover the balloon if needed?
- ✓ Can the business refinance or pay it if conditions change?
- ✓ Is the lower repayment today worth the future lump sum?
When equipment finance may fit
Equipment finance may fit when:
Examples:
- ✓ the asset has a clear commercial use
- ✓ the asset supports revenue, capacity or efficiency
- ✓ buying outright would weaken working capital
- ✓ the business wants repayments matched to asset use
- ✓ the asset can be identified and valued
- ✓ the business has quotes, invoices or supplier details
- ✓ repayment capacity is clear
- ✓ A plumber needs a new drain camera and jetter to win higher-value jobs
- ✓ A cafe needs a commercial oven before expanding the menu
- ✓ A manufacturer needs machinery to fulfil larger orders
When unsecured funding may be better
Equipment finance is not always the best path.
Unsecured business funding may be worth comparing if:
However, unsecured funding may cost more and repayment terms may be shorter. Compare fit, not just speed.
- ✓ the asset is low-value or hard to finance
- ✓ the business needs equipment plus working capital
- ✓ the purchase includes installation, training or mobilisation costs
- ✓ the asset is second-hand or specialised
- ✓ timing is more important than asset-backed pricing
- ✓ the owner does not want the facility tied to one item
What lenders may check
Lenders may ask for:
Used equipment may require more checks than new equipment.
- ✓ asset quote or invoice
- ✓ supplier details
- ✓ age and condition of asset
- ✓ serial number or asset identification
- ✓ ABN and business details
- ✓ trading history
- ✓ GST status
- ✓ bank statements
- ✓ financial statements for larger loans
- ✓ director identification
Tax and accounting caveat
Equipment purchases can have tax and accounting implications.
Depreciation, GST treatment, lease deductibility, instant asset write-off rules, interest deductibility and ownership treatment may vary.
Comparison One does not provide tax advice. Owners should speak with their accountant or registered tax professional before choosing a structure.
Mistakes to avoid
Mistake 1: Buying the asset but draining the buffer:
If the equipment leaves the business unable to cover wages, suppliers or tax, the purchase may create a new problem.
Mistake 2: Ignoring maintenance and insurance:
Equipment cost is not only the purchase price. Repairs, maintenance, storage, insurance, training and downtime matter.
Mistake 3: Choosing a balloon only for lower repayments:
A balloon can be useful, but it must be planned.
Mistake 4: Funding the wrong asset:
The asset should have a clear link to productivity, revenue, compliance or capacity.
Mistake 5: Not checking tax treatment:
The wrong structure can create accounting surprises.
Comparison One fit-first checklist
Before applying, answer:
- ✓ What equipment are you buying?
- ✓ Is it new or used?
- ✓ What quote or invoice do you have?
- ✓ How will it generate revenue or reduce costs?
- ✓ Would paying cash weaken working capital?
- ✓ Do you want ownership or flexibility?
- ✓ Are you considering a deposit or balloon?
- ✓ What maintenance and insurance costs apply?
- ✓ Have you spoken with your accountant?