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Commercial Equipment Loans | Business Lending

18 Jun Today's
best rate
Finance Equipment From
2.79 %
Fixed
*The Interest Rate is calculated on a Secured Loan for business use, effective 25/10/2021 and subject to change. WARNING: The interest rate is true only 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.

Compare Equipment Finance Interest Rates and Repayment Estimates

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
New Equipment Loan
2.79% Starts At
$949.58333333333
Monthly repayment
Used Older Secured Equipment Loan
4.50% Starts At
$1020.8333333333
Monthly repayment
Business Loans - Unsecured
7.99% Starts At
$1166.25
Monthly repayment
Business Loans - Secured
2.95% Starts At
$956.25
Monthly repayment
Overdraft - Non Bank
9.95% Starts At
$1247.9166666667
Monthly repayment
Chattel Mortgage
2.79% Starts At
$949.58333333333
Monthly repayment
Operating Leases
4.60% Starts At
$1025
Monthly repayment
Commercial Hire Purchase
2.79% Starts At
$949.58333333333
Monthly repayment
Rent To Own
9.95% Starts At
$1247.9166666667
Monthly repayment
Loan Product Interest Rate
Starts at:
Monthly Repayment
New Equipment Loan 2.79%
$949.58333333333
Used Older Secured Equipment Loan 4.50%
$1020.8333333333
Business Loans - Unsecured 7.99%
$1166.25
Business Loans - Secured 2.95%
$956.25
Overdraft - Non Bank 9.95%
$1247.9166666667
Chattel Mortgage 2.79%
$949.58333333333
Operating Leases 4.60%
$1025
Commercial Hire Purchase 2.79%
$949.58333333333
Rent To Own 9.95%
$1247.9166666667
Get a free quote

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.

Commercial Equipment Finance

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.

Business Finance can assist you in connecting with lenders that are best suited to your industry.

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.

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 loan type is best suited for your particular business 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.

Loan Structure

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

But all equipment loan products 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.

Sourcing Cost-Effective Equipment Finance

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.

Equipment Finance FAQ's

A vast range of equipment can be financed with a choice of several different types of finance which is available through multiple banks and lenders. With so many options and decisions to be made, questions can arise when businesses embark on financing new equipment. We’ve addressed a selection of typical questions to assist you. For further information, please reach out to us.

What loan types are available for buying equipment?   

Equipment can be financed through a number of products known as commercial lending facilities. The most popular forms of are Chattel Mortgage, Equipment Loan, Commercial Hire Purchase, Leasing and Rent to Own. These are secured forms of lending as the equipment is used as security against the loan being extended. Where a lender does not accept the equipment as security or the borrower has reasons for not offering the equipment as security, an Unsecured Commercial Loan may be a suitable type of lending. These products have varying features and benefits and suitability. Commercial owners are advised to consult with their accountant on the selection of the most appropriate option for their purchase.

Are all equipment loans tax deductible?   

Commercial lending facilities are structured to deliver a tax benefit to the commercial organisation borrower. But the way in which that tax benefit or deduction is realised and how the GST is applied, varies across the range of loans available. With Chattel the GST on the equipment purchase can be claimed on the BAS return immediately following settlement. The repayments are not fully tax deductible, only the interest is deductible. The income tax deduction is realised through depreciation of the asset in the annual commercial accounts and income tax return. With Leasing and Rent to Own the repayments are treated as an operating expenditure and as such are tax deductible. GST is applied to the payments and can be claimed on the appropriate BAS if the business is registered for GST.

How do I decide which type of equipment finance is best for me?   

The different types of lending available for equipment purchases are Chattel Mortgage, CHP, Leasing and Rent to Own. The major differences between these loan types relate to accounting aspects, in particular, suitability for either the cash accounting method or the accruals accounting method. So the accounting method used by your organisation will be a key determinant of the choice of credit. Other differences relate to ownership of the equipment during the loan term and that then relates to whether the asset is recorded in the balance sheet of the lender or borrower. So balance sheet strategy is also a consideration. Treatment of GST and tax deductions also varies. As these issues relate primarily to accounting issues, it is advisable to refer to your organisations accountant or financial advisor in making the decision.

Is the interest rate the same on all equipment loans?   

No. The interest rate varies across the different facilities and can vary across different categories of equipment. Referring to the equipment loan interest rates comparison chart, note that the interest rate currently achievable on Chattel and Equipment Loans is lower than that for Equipment Leasing and note that Rent to Own attracts a higher interest rate than the other loan types. If the equipment being purchased is not suitable for or accepted as security and an Unsecured Commercial Loan is sourced, the interest rate will be higher than for a secured loan. Interest rates also vary across different types of equipment as lenders assess loan applications based on a number of factors including the projected resale value of the assets.

Are low docs equipment loans available?   

Yes. When an organisation does not meet the loan criteria required for equipment lending by most banks and some non bank lenders, a low docs loan may be sought. The criteria may relate to not having traded for the eligibility period and as such not having the required financial records and documents, or docs, needed for the loan application. These docs may include BAS returns, income tax return, trading accounts, profit and loss statements and other financials. A Low Docs Equipment Loan is a loan to applicants that have little or no financials to accompany their loan application. The minimum requirement for such a loan is a current and active ABN and identification. These types of loans can be approved at the advertised interest rates for fully documented lending but typically have stricter criteria such as a good credit profile and may attract additional loan conditions. If approved for a low docs loan, it can then be applied to a Chattel, Leasing, Rent to Own or CHP, subject to individual lender requirements.
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