Spread the cost of machinery, vehicles, and tools over 2–7 years — while you use the equipment to generate income from day one. The equipment acts as security, so you don't need to risk your home. Options for new ABNs, startups, and established SMEs.
The mechanics are straightforward: a lender provides funds to purchase business equipment, the equipment is registered as security on the PPSR, and you repay the lender over a fixed term with interest. See the complete equipment finance guide.
The most common structure for small businesses is a chattel mortgage — you own the equipment from day one, the lender holds a security interest, and once paid off, the security is released. This structure offers the cleanest GST treatment and allows you to claim depreciation and interest as tax deductions. See chattel mortgage vs hire purchase explained.
When a large company with $50 million in revenue applies for equipment finance, lenders look at financial statements, balance sheets, and years of audited accounts. When a small business applies, the assessment is simpler but the documentation requirements can feel disproportionate for the size of the deal.
Here's what small business owners need to understand:
Lenders care about three things: Can you make the repayments? (income evidence) Will you make the repayments? (credit history) What happens if you don't? (the equipment as security)
For most small business equipment purchases, the equipment itself answers question three. That leaves income and credit as the two variables — and these can be evidenced in multiple ways depending on your business stage.
This is the strongest position. You have a track record, and lenders reward it.
What you'll need:
What you'll get: Access to the widest range of lenders and the most competitive rates (from approximately 5.5% p.a. for clean credit and strong financials). Fast approvals — 24–48 hours is typical.
You've got some history but not a deep track record yet. Lender options narrow slightly but remain solid.
What you'll need:
What you'll get: Access to most mainstream and specialist lenders. Rates typically 7–11% p.a. depending on credit and financials. Some lenders may ask for a deposit (10–20%) to offset the shorter trading history.
This is where most small business owners hit a wall — and where a broker makes the biggest difference.
What you'll need:
What you'll get: Access to specialist lenders who have specific products for new businesses. Rates are higher (typically 9–15% p.a.) and a deposit is usually expected. But approvals happen every day for businesses under 12 months old — it's about matching to the right lender, not applying everywhere and hoping.
If you're a small business owner whose accountant is behind on lodgements — which is extremely common — you can still access equipment finance through low-doc products. Instead of tax returns, lenders accept BAS statements and business bank statements as income evidence.
The low-doc premium is typically 0.5–2% above full-doc rates for equivalent profiles. On a $50,000 equipment purchase over five years, that's roughly $15–$50 extra per month — a reasonable trade-off when your accountant is six months behind and you need the equipment now. See low-doc finance options for ABN holders.
Virtually any business equipment with a definable resale value:
The general rule: if the equipment has resale value and a useful life beyond the loan term, it can likely be financed. For very small items (under $5,000), equipment finance may not be cost-effective — the establishment fees outweigh the benefit of spreading the cost. For items under $20,000, the instant asset write-off may make outright purchase more attractive from a tax perspective.
| Business profile | Rate range (chattel mortgage, secured) | Context |
|---|---|---|
| Established (3+ years), clean credit, new equipment | 5.5% – 8.0% p.a. | Best available rates |
| Established, clean credit, used equipment | 7.0% – 10.0% p.a. | Slight premium for used |
| Growing (1–3 years), clean credit | 7.5% – 11.0% p.a. | Less history = higher perceived risk |
| New business (under 12 months) | 9.0% – 15.0% p.a. | Specialist lenders, deposit recommended |
| Low-doc (any stage, clean credit) | Add 0.5–2% to above ranges | Premium for alternative documentation |
| Credit issues (any stage) | 12.0% – 15%+ p.a. | Specialist lenders, deposit usually required |
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 right equipment finance structure can deliver meaningful tax savings. Under a chattel mortgage (the most common structure for small business):
GST credit: If you're GST-registered, claim back the GST on the purchase price in your next BAS. On a $55,000 piece of equipment, that's approximately $5,000 back in your hands.
Instant asset write-off: For small businesses with aggregated turnover under $10 million, the $20,000 instant asset write-off threshold has been extended to 30 June 2026. Eligible assets costing less than $20,000 can be immediately deducted in the year of purchase. For a business on the 25% small business tax rate, that's up to $5,000 in tax savings. Search "instant asset write-off" at ato.gov.au for current eligibility and thresholds.
Interest deductions: The interest component of your repayments is generally tax-deductible as a business expense.
Depreciation: For assets above the write-off threshold, depreciation is claimable each year. Small businesses using the simplified depreciation rules can generally deduct 15% in the first year and 30% in subsequent years.
Consult your accountant for tax advice specific to your situation. The right finance structure depends on your business type, turnover, and how you use the equipment.
P.L., Caboolture, QLD. Landscape gardener, ABN active for 18 months. Needed to finance a Kubota mini excavator — purchase price $65,000. Bank declined because his ABN was under two years. We matched him to a specialist lender who approved on the basis of 12 months of BAS lodgements and clean business bank statements. Approved at 9.2% p.a. chattel mortgage with a 10% deposit. The excavator allowed him to take on larger contracts that more than covered the repayments within the first month. Individual circumstances vary.
N.M., Mascot, NSW. Bakery owner, trading for 5 years. Financing a commercial deck oven and proofer — combined purchase price $38,000. Clean credit, strong financials. We matched her to a lender offering 6.8% on a 4-year chattel mortgage. No deposit required. She claimed the instant asset write-off on the proofer ($18,500, under the $20,000 threshold) and is depreciating the oven over its effective life. Total annual tax benefit in year one exceeded $7,000. Individual circumstances vary. Consult your accountant for tax advice specific to your situation.
Yes. Most lenders require your ABN to be active for at least 6–12 months. Some specialist lenders consider shorter periods if you have industry experience, a deposit, and a clear business case for the equipment. Rates will be higher than for established businesses (typically 9–15% p.a.), but approval pathways exist.
Not always. Established businesses with clean credit can often access 100% finance. For newer businesses or higher-risk profiles, a deposit of 10–20% is typically expected and will improve both your approval chances and your rate.
Most lenders have minimum loan amounts of $5,000–$10,000 for equipment finance. Below this, the establishment and administration fees make finance less cost-effective. For very small equipment purchases, consider whether the instant asset write-off makes outright purchase a better option.
Equipment finance spreads the cost over the loan term, preserving working capital for operations. A $60,000 piece of equipment financed over 5 years at 8% costs approximately $1,217/month — significantly easier on cash flow than a $60,000 outright purchase. Balloon payments can reduce monthly costs further at the expense of a lump sum at the end.
Yes. Many lenders offer package deals for businesses purchasing multiple items — for example, a truck and a trailer, or a full workshop fit-out. Package deals can sometimes attract volume-based pricing. Ask your broker about consolidated equipment finance.
If you experience financial difficulty, contact your lender or broker early. Restructuring options (extending the term, temporary hardship arrangements) are generally available. If you default, the lender can repossess the equipment to recover the outstanding balance.
Equipment finance exists specifically so small businesses don't have to choose between buying the equipment they need and keeping cash in the bank. Whether you're an established SME or a business just getting off the ground, options exist.
Novara Finance works with small businesses at every stage. We know which lenders specialise in new businesses, which ones offer the most competitive rates for established SMEs, and which ones provide low-doc products when your accountant is running behind.
No cost, no obligation, no credit check to get started. Tell us what you need and we'll find the best option from our panel of 60+ lenders.
This article provides general information only and does not constitute financial or tax advice. Consult your accountant for tax advice specific to your situation. All 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.