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Commercial Equipment Loans | Business Lending

To purchase equipment for commercial loans and acquire assets is available through a large number of banks and lenders throughout Australia. It is one of the most popular and therefore highly competitive categories. The banks and lenders usually advertise their equipment loan interest rates and general terms and conditions on their website so some basic information is easy to access.

However, as it is a competitive sector, using a commercial loan to negotiate the best commercial interest rates and best loan deal can prove a savvy move. There are lenders that specialise in certain categories, defined either by industry or by the type of equipment or machinery. As these lenders are more active in that particular area they usually have a better understanding of the industry, possibly assess as a lower risk loan and offer better equipment deals.

Our specialised brokers can assist you in connecting with lenders that are best suited to your industry.

Business Finance Commercial Equipment Loans | Business Lending
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Comparison
Compare Equipment Loan Rates

Compare Chattel with Leasing, CHP with Rent to Own, Rent to Own with Leasing using our easy and free to use interest rate comparison calculator. We’ve listed the interest rates we are currently achieving across our loan portfolio as an easy reference guide. Simply enter the amount and term of your loan and immediately see the different repayment estimates.

Loan Amount Loan Term
Loan Product Interest Rate Monthly Repayment
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Disclaimer: The comparison chart displays the interest rates currently being achieved for different equipment finance products by Business Finance Australia. This calculator is provided solely as a reference guide only and in no way is intended as application form or to represent or indicate any offer of lending. Any repayments generated using this device are not an offer or approval. The fees and charges applicable to equipment lending as charged by individual lenders and brokers are not accounted for in the calculations. Any offer made to you for loan may be at a different interest rate and have a different repayment amount than the values shown.

18 May

Today's best rate

Finance Equipment From

4.99 % Fixed

* The interest rate is calculated on a secured loan for commercial use, effective 18/05/2024 and subject to change. Warning: the interest rate is only true for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

18 May

Today's best rate

Finance Equipment From

4.99 % Fixed

* The interest rate is calculated on a secured loan for commercial use, effective 18/05/2024 and subject to change. Warning: the interest rate is only true for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

Exploring Equipment Loans: Options and Solutions
Types of Equipment Loans

The Equipment Finance category may include just about every asset, item of machinery and equipment required for the operation of a business across all industries.

Included but not limited to:

  • Mining, drilling, resources and excavation.
  • Agricultural and farming machinery and equipment.
  • Construction, building, civil works and earth-moving equipment.
  • Gym, fitness, beauty salons and equipment for other personal commercial services.
  • Manufacturing, machine shops, engineering workshops and heavy duty machinery requirements.
  • Waste, recycling and processing plant equipment.
  • Medical practices and centers and health facilities.
  • General commercial equipment such as computers, fit-outs, IT, hardware, software and machines.
  • Warehousing and storage equipment including shelving and racking and forklifts.
  • Marine industry equipment including barges, salvage equipment and vessels.

And many more! If you require machinery and equipment, there is most likely a lender that will offer you equipment loan.

Guide to Selecting the Right Fit
Equipment Loan Types

Equipment Finance is available across the full portfolio of commercial facilities including:-

  • Chattel Mortgage: the most popular and versatile loan type.
  • Equipment Leasing: an off-balance sheet loan.
  • Commercial Hire Purchase (CHP): very commonly used for equipment.
  • Rent to Own: an off-balance sheet finance facility.

Each loan type has its own features and benefits in regard to suitability to either cash accounting or accruals accounting method; treatment of GST; tax deductions; balance sheet strategy; asset depreciation and ownership of the asset through the term of loan.

To decide which funding option is best suited for your particular commercial structure and will deliver the greatest advantage, it is advisable to consult with your accountant.

For the specific details of each loan type, please refer to our web pages where we provide full descriptions.

Understanding Equipment Loans Structure
Equipment Loan Structure

Each facility has its own features and individual lenders may offer variations dependent on individual commercial requirements.

But all equipment funding usually include:

  • A fixed interest rate which is fixed for the loan term.
  • A fixed loan term, determined on the value of the equipment, its age and condition.
  • Fixed monthly repayments.
  • Option for a balloon, residual or payout which is a percentage of the loan amount which is due for payment, usually as a lump sum, at the end of the loan term.
Efficiency in Business Growth: Navigating Long-Term Loan Solutions

Your Guide to Smart Sourcing
Sourcing Cost-Effective Equipment Financing

As this is a highly competitive loan category, commercial entities are advised to consider a range of lenders to source the best deal.

Who should you contact? We have connections with a large number of major banks, non-bank lenders and brokers that operate in the equipment lending area.

Connect with us for lenders and brokers that offer cost-effective and tailored equipment loans.

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FAQs
Equipment Financing

The main asset acquisition finance products are Chattel Mortgage, Leasing, Commercial Hire Purchase and Rent to Own. These are secured funding products. The machinery is accepted as the security against the funding. With some applications, the lender may request additional collateral. This may take the form of a personal guarantee or other property. The security required may be determined by the credit assessment. Low Doc, No Doc and bad credit applicants may be required to provide additional security.

Yes. Funding arrangements for plant, machinery and equipment used in an enterprise may be refinanced. Refinancing is the process of replacing existing funding arrangements with new contracts. The refinancing may be with the same or a different product and with the same or a different lender. Fees typically apply when a loan is finalised prior to the scheduled end of the term.

No, deposit funding may be requested. This refers to the entire purchase price forming the amount borrowed. Approval of all loan amounts is subject to individual lender decisions. With some machinery, the costs of delivery, installation and commissioning may also be included in the total amount requested.

Where an individual is setting up a new business, they usually do not have all the documentation required to complete the application form. In these instances, the individual may seek No Doc or Low Doc options. This is a description of the type of application and not specific funding products. If approved as a Low Docs or No Docs applicant, the applicant may have their choice of Chattel Mortgage, Rent to Own, Commercial Hire Purchase and Leasing products.

The interest rate offered by individual lenders will be determined after an assessment of the application. Considerations include the creditworthiness of the business, the owner in some cases, the age and condition of the goods being purchased and the total amount requested. The rates advertised by lenders are typically for funding new goods and for operators with a good credit profile.

Yes. This general category of funding encompasses all types of plant, machinery and other goods to be used in and by an enterprise. It encompasses virtually all industry sectors including the fitness sector. The interest rates offered can vary depending on the industry sector. Some lenders may offer funding to specific industry sectors only. Others will have a broader offering across a wide spectrum of sectors.

The tax deductible elements of funding products vary with the exception of interest charges. The interest charge portion of all repayments are deductible. With Leasing and Rent to Own, the monthly payments are treated by the ATO as expenses and are tax deductible. With Chattel Mortgage and Commercial Hire Purchase, the interest portion is deductible but the balance is not. These products realise a tax deduction through depreciation of the asset.

Yes. All types of enterprises may be eligible for funding equipment for their operation. This includes small and medium enterprises. Where a SME has been operating for a reasonable timeframe, they may have acquired all the documentation required to complete the application form. Where a SME is a relatively new enterprise without all the documentation, they may seek out a lender that offers Low Doc and No Doc options.

A balloon payment relates to the Chattel Mortgage funding product. It is a part of the total loan amount which is set aside for payment at the end of the term. It is usually expressed as a percentage of the loan amount. The balloon amount is subject to lender approval. The balloon is paid in a lump sum when all monthly payments have been finalised. A balloon may be finalised by the enterprise using existing funds or by sourcing a new financing arrangement. Effectively refinancing the balloon.

The terms for funding equipment will vary according to the lender’s criteria and details in the application. These may be in relation to the creditworthiness of the applicant, the age and condition of the goods being acquired, and/or the amount being requested. Terms of up to 7 years are available through a range of lenders.

Lenders will set the minimum amounts for their own portfolio. There is no general rule across the sector for minimum funding amounts. There are many lenders offering this type of funding and businesses may canvass a range or utilise a broker to assist with identifying a suitable lender. Where the amount is below the threshold for asset acquisition finance, operators may consider other options. These may include secured or unsecured funding or overdraft.

Yes. Getting approved prior to attending an auction can be arranged. The pre-approved process involves processing an application through to the stage of being approved for the amount requested. As the amount of the purchase may not be known prior to auction, it may be estimated for the purpose of the application. When the purchase is made and the exact amount required is known, this is conveyed to the lender and a specific offer for that amount prepared.

No. Rates generally vary for new and used goods. The rate for used goods may be higher than for new. The decision will be based on an assessment of the age and condition of the goods and lender criteria. Rates also vary across the range of funding products and for different industry sectors. A quote should be requested to receive a specific rate.

Yes. Holding an Australian Business Number (ABN) which is current, is a pre-requisite for eligibility for commercial funding. Where an operation is setting up, the ABN should be obtained prior to a funding application being submitting. Identification is also required. It is not essential that an enterprise be registered for GST.