Equipment finance lets your business acquire machinery, vehicles, and tools without paying the full cost upfront. Novara compares 60+ lenders to find the right structure and rate for your asset.
Equipment finance is a category of secured business lending. The "security" is the equipment you're buying — the lender registers their interest on the PPSR until the loan is fully repaid.
This security arrangement is what makes equipment finance fundamentally different from a standard business loan. With a business loan, the lender assesses your overall business health and may require property as security. With equipment finance, the lender focuses on the equipment's value and your ability to make the repayments. This means:
Almost any business asset that holds tangible value. The most common categories we finance at Novara include:
The general rule: if the equipment has a definable resale value and a useful life beyond the loan term, it can likely be financed.
This is where most business owners get confused — and where the wrong choice can cost you thousands in unnecessary tax or interest.
How it works: The lender provides funds for you to purchase the equipment. You own the asset from day one. The lender takes a "mortgage" (security interest) over the equipment until the loan is repaid. You make fixed repayments over the term, and once paid off, the security is released.
Ownership: You own the equipment immediately.
Tax treatment (general guide):
Best for: Most Australian SMEs buying equipment they intend to keep. Chattel mortgage is the most common equipment finance structure in Australia — it combines ownership, competitive rates, and favourable tax treatment.
Typical rates: From approximately 5.5%–7% p.a. for established businesses with clean credit financing new equipment, through to 9%–12% p.a. for newer businesses or used equipment. Rates current as of June 2026. Individual circumstances vary.
How it works: The lender purchases the equipment and hires it to you over an agreed term. You make regular hire payments. At the end of the term, you pay a final residual amount (often nominal — as low as $1) and take full ownership.
Ownership: The lender owns the equipment during the term. Ownership transfers to you at the end, once the residual is paid.
Tax treatment (general guide):
Best for: Businesses that prefer the certainty of fixed payments with an option to own at the end.
Typical rates: From approximately 6%–10% p.a. for standard business profiles. Rates current as of June 2026. Individual circumstances vary.
How it works: The lender owns the equipment and leases it to you for a fixed term. You make regular lease payments for the right to use the equipment. At the end of the term, you may have the option to purchase the asset at market value, extend the lease, or return the equipment.
Ownership: The lender retains ownership throughout. You are renting the use of the equipment.
Tax treatment (general guide):
Best for: Businesses that prefer to upgrade equipment regularly (technology, fleet vehicles), businesses that don't want the asset on their balance sheet, and situations where the equipment may become obsolete before the end of its useful life.
Typical rates: From approximately 7%–15% p.a. depending on the equipment and business profile. Rates current as of June 2026. Individual circumstances vary.
Important: consult your accountant for tax advice specific to your situation. The tax treatment described above is general in nature. Your specific structure (sole trader, company, trust), GST registration status, and the way you use the equipment all affect the outcome.
| Factor | Chattel mortgage | Hire purchase | Finance lease |
|---|---|---|---|
| You own the equipment | From day one | At end of term | No (lender owns) |
| Typical rates | 5.5%–10% | 6%–10% | 7%–15% |
| GST claim | Upfront on purchase | Varies by structure | Progressive on payments |
| Depreciation claim | Yes (you own it) | Generally yes | No (lender claims) |
| Instant asset write-off | Generally eligible | Generally eligible | Generally not eligible |
| Balloon/residual | Optional | Usually required | Usually included |
| Best for | Most businesses buying to keep | Fixed payments + ownership | Businesses wanting to upgrade regularly |
Tax treatment is general in nature. Consult your accountant for advice specific to your situation.
Equipment finance rates track above the cash rate with a margin that reflects the lender's risk assessment.
| Business profile | Typical rate range (secured) | What drives the rate |
|---|---|---|
| Established business (3+ years), clean credit, new equipment | 5.5% – 8.0% p.a. | Lowest risk. Strong trading history, asset holds value. |
| Established business, clean credit, used equipment | 7.0% – 10.0% p.a. | Used equipment = lower resale value = slightly higher rate. |
| Newer business (1–3 years), clean credit | 8.0% – 12.0% p.a. | Less trading history = higher perceived risk. |
| Startup or new ABN (under 12 months) | 10.0% – 15.0% p.a. | Limited history. May require deposit or additional security. |
| Business with credit issues | 12.0% – 15%+ p.a. | Specialist lenders required. Options exist but rates reflect risk. |
Rates current as of June 2026. Comparison rates will be higher once fees are included. Individual circumstances vary. Subject to lender criteria and approval.
The gap between 5.5% and 15% is enormous — on a $100,000 equipment purchase over five years, that's the difference between roughly $1,910/month and $2,380/month. That's an extra $28,200 over the life of the loan.
The factors that shift your rate within that range:
Equipment finance is one of the areas where a broker adds the most value — more so than car loans or home loans.
Before you talk to a broker or lender, have the basics clear:
For a standard (full-doc) application, most lenders need:
For a low-doc application (if tax returns aren't available):
A broker reviews your situation, recommends the right finance structure, and matches you to the lender offering the best rate for your specific equipment purchase and business profile. This pre-assessment stage doesn't generate a credit enquiry.
Once you've chosen a lender and structure, the broker submits the application. For straightforward applications with established businesses, approvals can come through within 24–48 hours. More complex deals (new businesses, larger amounts, specialist equipment) may take 3–5 business days.
Documents are signed, the lender pays the equipment supplier, and you take delivery. For chattel mortgages and hire purchase, the lender registers their security interest on the PPSR. Once the loan is fully repaid, the security is released.
Our panel includes lenders who specialise in each asset class — because the lender that's best for trucks isn't necessarily the lender that's best for medical equipment.
Trucks and heavy vehicles: From single owner-operator prime movers to fleet purchases of 20+ vehicles. This is our highest-volume category. Read our truck finance broker guide.
Earthmoving and construction: Excavators, loaders, bobcats, graders, rollers. High-value assets with strong resale markets — typically attracts competitive rates. See construction finance.
Manufacturing and industrial machinery: CNC machines, lathes, presses, welding equipment, production lines. Lender selection matters here — specialist manufacturing lenders assess these assets differently from generalist lenders. Read our machinery finance guide or see manufacturing sector finance.
Commercial vehicles and fleet: Utes, vans, buses, refrigerated vehicles. Fleet deals with multiple vehicles can access volume-based pricing through the right lender. See fleet finance.
Agricultural: Tractors, harvesters, irrigation equipment, livestock handling. Seasonal cash flow consideration is important — some lenders offer structured repayments aligned to harvest cycles. See agriculture finance.
Medical and dental: Imaging machines, dental chairs, surgical equipment, veterinary equipment. Specialist lenders in this space understand the high value and long useful life of medical equipment. See healthcare finance.
Hospitality and food service: Commercial kitchens, coffee machines, food trucks, cold rooms.
For established businesses with clean credit and standard documentation, approvals can come through within 24–48 hours. Low-doc applications or more complex deals (new businesses, specialist equipment, larger amounts) typically take 3–5 business days. We've seen same-day approvals for straightforward applications through our specialist lender panel.
Not always. Many lenders offer 100% finance (no deposit) for new equipment purchases by established businesses with clean credit. For used equipment, higher-risk profiles, or newer businesses, a deposit of 10–20% can improve your rate and approval chances. Some lenders offer zero-deposit options even for startups, but at a higher rate.
Yes. Specialist lenders work with businesses that have credit issues — defaults, late payments, even previous company insolvency. Rates will be higher (typically 12–15%+ p.a.) and a deposit is usually required. A broker can assess whether your situation is workable and which lender is most likely to approve.
The main difference is ownership timing. With a chattel mortgage, you own the equipment from day one and the lender holds a security interest. With hire purchase, the lender owns the equipment during the term and ownership transfers to you at the end. The tax treatment, GST handling, and rate structures also differ. Read the full comparison.
Yes. Most lenders finance used equipment, though there are typically age and condition requirements. A common guideline is that the equipment should have a reasonable remaining useful life beyond the loan term — for example, a 10-year-old truck financed over 5 years should still have operational value at year 15. Used equipment typically attracts slightly higher rates than new because of the reduced resale value.
The interest on equipment finance is generally tax-deductible as a business expense. Depending on the finance structure, you may also be able to claim depreciation and the instant asset write-off. The specific tax treatment depends on whether you use a chattel mortgage, hire purchase, or lease — and on your business structure. Consult your accountant for tax advice specific to your situation.
The instant asset write-off allows eligible businesses to immediately deduct the cost of eligible assets in the year they're purchased, rather than depreciating them over several years. This generally applies to chattel mortgages and hire purchase (where you own or will own the asset) but not to finance leases or operating leases (where the lender claims the depreciation). The threshold and eligibility criteria change regularly — check with your accountant or the ATO for the current rules before making a purchase decision.
If you default on equipment finance, the lender has the right to repossess the equipment (because it serves as the loan's security) and sell it to recover the outstanding balance. If the sale doesn't cover the full debt, you may be liable for the shortfall. If you're experiencing financial difficulty, contact your lender or broker early — restructuring options (extending the term, temporary hardship arrangements) are often available and are easier to arrange before a payment is missed than after.
Whether you're buying a single piece of equipment or financing a fleet, the first step is a conversation with a broker who understands your equipment, your business, and the lender landscape. No cost, no obligation, no credit check just to get a quote.
This article provides general information only and does not constitute financial advice. Tax-related information is general in nature — consult your accountant for advice specific to your situation. All equipment finance applications are subject to lender criteria and approval. Rates mentioned are indicative and current as of June 2026 — individual circumstances vary. Novara Finance Pty Ltd | AFSL 517192 | ABN 99 687 789 144.