Equipment Finance Guide — Asset Finance in Australia
A practical guide to funding vehicles, machinery and technology — from chattel mortgages and finance leases to balloon strategies, approval timelines and end-of-term options. Compare structures across 35+ lenders.
Page Contents
Structures & Use-Cases
Chattel Mortgage (most common)
Ownership is in your name from day one; the lender registers a security interest. Fixed repayments, optional balloon, and terms that match useful life. Favoured for vehicles, yellow goods and long-life plant.
Finance / Operating Lease
The funder owns the asset; you pay to use it. Options at term: return, extend, or purchase (residual). Useful when tech refresh cycles are short or balance-sheet presentation matters.
Commercial Hire Purchase & Asset Lines
Hire purchase is similar to chattel mortgage with title passing at the end; asset lines let frequent buyers draw under one facility for faster turnarounds and fleet growth.
Vehicles, trucks and trailers, yellow goods, manufacturing plant, agri machinery, medical/dental equipment, IT/AV, refrigeration and solar are routinely funded. Age, condition and vendor type influence terms. See our truck finance overview and try the equipment finance calculator.
Lender policies vary by asset age/condition, dealer vs private sale, hours/kilometres and serial/PPSR history. We’ll align term and balloon to realistic resale so the final payment isn’t a surprise.
Equipment Finance Estimator — quick indicative
Results
Enter a price to see deposit, residual, financed amount and monthly repayments with and without a balloon. Includes a +2% buffer to stress-test cash flow.
Indicative only. Structures differ in tax and accounting treatment — confirm with your accountant before acting.
What affects this?
- Asset age, brand and resale depth
- Dealer vs private sale; serial number & PPSR history
- ABN age, GST registration, financials or bank-statement health
- Balloon size vs useful life and kilometre/hour profile
For context only: GST on purchase ≈ 10% of price; eligibility and timing depend on structure and your circumstances.
Chattel vs Lease vs Hire Purchase
- Ownership: You own the asset; lender registers security (PPSR).
- Cash-flow: Fixed repayments; optional balloon to lower monthly outgo.
- Tax basics: Talk to your accountant about depreciation and GST claims.
- Typical term: 3–7 years aligned to useful life.
Deposit & Residual (Balloon) Guidelines
| Asset / scenario | Typical deposit | Residual (end of term) | Notes |
|---|---|---|---|
| New vehicles & yellow goods | 0–10% | 0–40% | Strong terms with dealer invoice and warranty. |
| Used trucks & trailers (≤10 yrs) | 10–20% | 0–30% | Private sale OK with inspection; hours/km drive caps. |
| Specialised plant (CNC, print, medical) | 10–30% | 0–40% | Secondary market depth matters; vendor support helps. |
| Very old / specialised / limited resale | 20–40%+ | 0–20% | Shorter terms; case-by-case with inspection and photos. |
| Tech / IT / AV bundles | 0–20% | 10–50% | Leases common due to refresh cycles. |
New vehicles & yellow goods
- Deposit
- 0–10%
- Residual
- 0–40%
Used trucks & trailers
- Deposit
- 10–20%
- Residual
- 0–30%
Specialised plant
- Deposit
- 10–30%
- Residual
- 0–40%
Older/specialised
- Deposit
- 20–40%+
- Residual
- 0–20%
Tech / IT / AV
- Deposit
- 0–20%
- Residual
- 10–50%
Right-sizing the balloon keeps repayments comfortable while matching the asset’s resale curve. We map term and residual to hours, kilometres or duty cycle so the final payment isn’t a shock.
Tax Basics (talk to your accountant)
GST & Timing
GST input-tax credits on eligible purchases are generally claimable when you hold a valid tax invoice and are registered for GST. Timing can depend on structure and your accounting method.
Passenger vehicle “car-limit” caps
For certain passenger vehicles, GST credits may be capped under the ATO car-limit rules. Ask your accountant if the cap applies to your purchase.
Four-year rule
There’s a time limit to claim past GST credits (commonly four years and one day). Don’t miss the window — keep invoices and lodge promptly.
Neutral info only; we don’t provide tax advice. See the ATO for guidance.
PPSR & Serial-Number Checks
Before settlement: run a PPSR search on the grantor and, where applicable, by serial number. Only specific classes (e.g., motor vehicles, watercraft, aircraft) are “serial-numbered collateral.” Many items with serials aren’t searchable by serial — use the grantor search.
- Collect clear photos and service history.
- Verify serials (VIN/HIN/engine) match the invoice.
- Ensure no undisclosed encumbrances appear on PPSR.
Worked Case Studies (Indicative)
Case A — Prime mover & tipper
| Scenario | Numbers |
|---|---|
| Price (ex GST) | $290,000 |
| Deposit | 10% → $29,000 |
| Balloon | 30% → $87,000 (end of term) |
| Term | 5 years (fixed) |
| Notes | Dealer sale, warranty; repayments aligned with seasonal work. |
Case B — Dental chair & imaging
| Scenario | Numbers |
|---|---|
| Price (ex GST) | $180,000 |
| Deposit | 0% (lease) |
| Residual | 20% → $36,000 |
| Term | 5 years (lease) |
| Notes | Bundle includes service plan; refresh option at end. |
Case C — 8-ton excavator
| Scenario | Numbers |
|---|---|
| Price (ex GST) | $145,000 |
| Deposit | 20% → $29,000 |
| Balloon | 10% → $14,500 |
| Term | 4 years (chattel) |
| Notes | Private sale with inspection; serials checked and PPSR cleared. |
Prime mover & tipper
- Price
- $290k ex GST
- Deposit
- $29k
- Balloon
- $87k
- Term
- 5 yrs
Dental chair & imaging
- Price
- $180k ex GST
- Deposit
- 0%
- Residual
- $36k
- Term
- 5 yrs
8-ton excavator
- Price
- $145k ex GST
- Deposit
- $29k
- Balloon
- $14.5k
- Term
- 4 yrs
Figures are indicative. We’ll run exacts once we confirm asset type, vendor, age/condition and your preferred structure.
Serviceability & Assessment
Full-doc (sharper pricing)
- Two years’ financials and BAS with sensible add-backs.
- Lower margins, larger balloons and longer terms available.
- Best for stable or growing trading businesses and fleets.
Alt-doc / Bank-statement programs
- Six–twelve months’ statements to show inflows and headroom.
- Faster decisions; helpful for newer ABNs or recent growth.
- Premium vs full-doc; tighter on older or specialised assets.
If you’re reviewing existing debts or repayments across the business, try our interest rate review calculator to sense-check savings and cash flow impacts.
Up-Front & Ongoing Costs
Up-front
| Item | Indicative |
|---|---|
| Application/doc fee | $0–$990+ (lender-specific) |
| PPSR / registration | $10–$100 (per asset/security) |
| Inspection/valuation | $0–$600+ (age/value dependent) |
| Brokerage / settlement | Included or itemised per lender |
Ongoing
| Item | Indicative |
|---|---|
| Interest & margin | Asset risk, age and docs drive rate |
| Account keeping | $0–$20/mo (if applicable) |
| End-of-term fee | Residual or purchase option per contract |
| Early payout | Break/discounted interest method varies |
Up-front
- Doc fee
- $0–$990+
- PPSR
- $10–$100
- Inspection
- $0–$600+
- Brokerage
- Varies
Ongoing
- Interest
- Risk-based
- Keeping
- $0–$20/mo
- End-term
- Per contract
- Payout
- Varies
Your 4-Week Game Plan
Week 1 — Brief & quotes
Confirm entity, asset list and usage. Gather invoices/photos, clear PPSR, and shortlist lenders by term, balloon and turnaround. Consider an asset line for repeat purchases.
Week 2 — Approval
Submit full-doc or bank-statement alt-doc. For private sales, order inspection early. Lock rate on acceptance where available and pre-agree balloon/end-of-term path.
Week 3 — Docs & delivery
Docs issued, signed and certified. Insurance finalised noting the lender’s interest. Vendor receives payout letter and settlement instructions. Delivery booked.
Week 4 — Post-settle
We check first repayment, confirm PPSR registration and provide an asset schedule. For fleets, we set review and refresh dates.
From Approval to Delivery
Settlement is logistics: signed contracts, identification, proof of insurance, and a clean PPSR. We coordinate vendor payout and delivery so you’re not stuck with a machine you can’t use or a bill you didn’t expect. For staged builds, we use progress payments and confirm serials as each item lands.
Managing Your Facility
Match repayments to how the asset earns — monthly for constant-use gear or seasonal for agri and civil. Keep insurance current and store your asset schedule, serials and policy numbers together. Track hours and kilometres to avoid a balloon that overshoots realistic resale. If cash flow improves, consider partial prepayments; if it tightens, talk to us early to renegotiate before issues arise.
Glossary — Equipment Finance Terms
Quick definitions for terms you’ll see in quotes and contracts. Expand any term below.
Chattel Mortgage
A loan secured against a specific asset you own from day one. Fixed repayments; optional balloon at the end. Security is registered on the PPSR.
Finance Lease
The funder owns the asset and you pay to use it. At term you may return, extend or pay a residual to take title (terms vary).
Balloon / Residual
A final lump-sum payment due at the end of term. Lowers monthly repayments but increases the amount due later; align with expected resale.
PPSR
National register of security interests over personal property. Lenders record their interest; buyers check it to avoid encumbered goods.
Alt-doc
Assessment path using bank statements or BAS instead of full financials. Faster decisions with pricing reflecting reduced disclosure.
Asset Line
A reusable limit for multiple purchases under one set of documents — speeds up frequent acquisitions.
Asset Finance FAQs
How much can I finance without a deposit?
New vehicles and mainstream machinery are often 100% funded with dealer invoices and strong trading. Used or specialised assets may need 10–30% down. We’ll set expectations so the numbers work without stretching cash reserves.
What balloon should I choose?
Start with expected resale at term end and work backward. If an excavator should retain ~30% after five years of your duty cycle, a 20–30% balloon is typically sensible. Too high and you face a gap; too low and monthly cash flow is tighter than necessary.
Can I fund a private sale?
Yes — with extra checks: serial verification, PPSR clearance, inspection and photos. The lender wants comfort that the asset exists, is unencumbered and is fit for purpose. We coordinate these steps so settlement isn’t delayed.
How fast can I get approved?
Simple full-doc or bank-statement programs can clear in days once we have the basics. Private sales or older assets can add time for inspection. We prioritise lenders that consistently hit their turnaround targets.
Can startups get equipment finance?
Yes, case-by-case. Expect stronger deposits, guarantees and possibly alternative security. Bank-statement programs can help where financials are limited.
Do I need comprehensive insurance?
Yes. Lenders require it before settlement, often with the lender noted as an interested party. It protects you and ensures smooth payout if there’s a loss.
Meet your broker
Rate Challenge – Mortgage & Finance Brokers. 35+ lenders, Australia-wide. Member FBAA. We structure asset finance that fits your cash-flow and upgrade cycle, then project-manage documents and delivery end-to-end.
Privacy: We’ll never sell your data. One of our brokers will call you the same business day.
Speak with an asset finance broker
Accurate as of 08/11/2025. Policies and pricing change — confirmed at application time.
Disclaimer: This guide is general information only. It doesn’t take your personal objectives or financial situation into account. Please obtain independent advice before acting.