Financing equipment — a truck, trailer, excavator, tractor, forklift or any other business asset — is one of those things that feels intimidating the first time and routine by the third. This guide covers everything a typical Australian tradie or small business owner needs to know before signing on any equipment finance deal in 2026: how it works, what lenders actually look for, the difference between chattel mortgage and lease, real interest-rate ranges, and the mistakes that cost people money.
If you already know how equipment finance works and just want a quote, get a free no-obligation indication through Asset Scanner Finance or call an Equifund broker on 1300 464 805 — you'll usually get an answer inside 4 hours.
What is equipment finance?
Equipment finance is a secured loan used to buy a specific business asset. A lender puts up the money, you take ownership of the asset on day one, and you repay the loan in fixed weekly, fortnightly or monthly instalments over an agreed term (usually 3-5 years, sometimes up to 7). The asset itself is registered as security — which is why equipment finance rates are typically much lower than an unsecured business loan or credit card.
Almost anything with a serial number and a useful life over 12 months can be financed: prime movers, tippers, rigid trucks, curtainsiders, tautliners, tag trailers, excavators, loaders, skid steers, telehandlers, dozers, graders, rollers, tractors, headers, balers, forklifts, boom lifts, food trucks, coffee vans, medical equipment. Most brokers will do deals from $10,000 up to $2M+.
How much can you actually finance?
For an established ABN (2+ years of trading, clean credit history, decent bank conduct), most tradies can access $0 deposit finance up to roughly the value of one year's turnover. So a business turning over $500,000 a year is comfortably in the range for a $250,000 truck deal, and turning over $1M a year opens the door to fleet-scale purchases.
Newer ABNs (under 2 years), sole traders with a limited trading history, or applicants with credit blemishes may need a deposit of 10-20%, a trade-in, or a personal guarantee. Second-chance lenders will still write these deals — the rate is higher but the finance is available.
What lenders actually look for
The four things a lender assesses:
- Serviceability — can your business afford the repayment on top of existing debt? Lenders look at business banking conduct, GST turnover, existing loan repayments, and (for smaller deals) may just want a bank statement and ABN check.
- Credit history — clean credit is a green light; recent defaults, judgments, or high credit utilisation slow things down but don't kill deals. Most second-tier lenders will work with credit scores from 400 up.
- Asset security — the asset itself. Well-known brands with strong resale (Kenworth, Cat, Komatsu, Volvo, John Deere) are the easiest to fund. Uncommon or very old assets sometimes require a bigger deposit because the lender's downside is thinner.
- Deposit / equity — 0-20% depending on the deal profile. A trade-in counts as equity.
Chattel mortgage vs lease vs rent-to-own — which is right?
Three main structures cover 95% of Australian equipment deals:
Chattel Mortgage. The standard. You own the asset from day one, the lender takes a security interest, and you repay the loan over 2-7 years. Big advantage: GST on the asset can be claimed back on the next BAS (a chunky cash-flow win), and the asset is fully depreciated against tax over its useful life. This suits ~80% of small-business equipment purchases.
Finance Lease. The lender owns the asset, you lease it and pay fully-deductible rentals over the term. At term end you either pay a residual and take ownership, roll into a new lease, or hand the asset back. Suits businesses that prefer 100% deductible payments and don't want the asset on the balance sheet.
Rental (Operating Lease). Similar to a lease but shorter-term (2-4 years) and structured so the asset always goes back at term end. Best for tools with a defined useful life or where the business turns equipment over regularly. Rentals are 100% tax-deductible but there's no ownership at the end.
Your accountant is the right person to make the final call, but if you're keeping the asset for the long haul, chattel mortgage is the default for a reason.
The pre-approval process, step by step
- Get a quote (5 minutes). Provide ABN, name, phone, email, the asset type and rough purchase price. This stage leaves no trace on your credit file, and gives you an indicative rate and repayment range.
- Submit documents (10-30 minutes). For low-doc deals under $150K: ABN, driver's licence, one recent bank statement. For full-doc deals or over $150K: add 6 months of business bank statements, most recent BAS, and ATO portal print-out. Full financials are only needed for very large deals ($500K+).
- Credit assessment (2-24 hours). The broker submits to the best-fit lender on their panel — this is the point at which a credit enquiry is recorded on your file. You get either an approval, a conditional approval (usually asking for one more document), or a decline with a reason.
- Loan documents (1-2 hours). Sign electronically. Read the term, rate, balloon (if any), fees, and early payout clauses.
- Settlement (24-48 hours). Once documents are signed and the asset is verified (VIN check, inspection where required), funds go direct to the seller and you take delivery.
End-to-end, most simple deals settle in 3-5 business days. Complex deals or large asset values can stretch to 7-10 days.
Interest rates in 2026 — what to expect
Indicative ranges as of August 2026 (rates change constantly, treat these as ballpark):
- Prime borrowers, established ABN, strong asset: 7.5% - 9.5% p.a.
- Standard borrowers, minor credit issues, 2+ year ABN: 9.5% - 12.5% p.a.
- New ABN or low-doc deals: 11% - 14% p.a.
- Second-chance / bad credit: 14% - 18%+ p.a.
The single biggest lever on the rate you actually get is asset security. A brand-name truck under 10 years old with strong resale will always attract a better rate than a niche piece of machinery. The second-biggest lever is bank-statement conduct — clean cash flow with no dishonours or excess fees signals a lender you're serviceable.
Tax implications (short version)
On a chattel mortgage, three things happen at BAS/tax time:
- You claim the GST on the asset purchase price back on the BAS in the quarter you buy it.
- You claim the interest portion of your loan repayments as a business expense.
- You claim depreciation on the asset over its effective life (or via instant asset write-off if the asset and your turnover qualify — thresholds change year to year, check the current ATO rules).
Between the instant GST back, the interest deduction, and the depreciation write-off, the after-tax cost of financed equipment is a lot lower than the sticker rate suggests. Confirm with your accountant before you buy.
The 5 mistakes people make
- Taking dealer finance without an independent quote. Dealer finance is convenient but tied to one or two lender relationships. An independent broker shops across 30-40+ lenders — 8 times out of 10 they'll match or beat the dealer's rate.
- Chasing the lowest advertised rate. The rate you actually get depends on your profile, not the headline number. A broker who tells you their "starting rate" is 6.99% may push you to a lender that declines you, wasting a credit enquiry.
- Applying at multiple lenders directly. Every application is a credit enquiry, and 5 enquiries in a month tanks your file. Use ONE broker who submits ONE application to the best-fit lender.
- Under-estimating the residual/balloon. A big balloon reduces your weekly repayment but leaves a lump sum owing at term end. Fine if you're trading in or refinancing; painful if you're keeping the asset and haven't saved for it.
- Not sorting finance before you shop. When the right machine comes up, the deal moves in days, not weeks. Get pre-approved so you can move on a good buy without losing it to someone with cash.
Getting started
The fastest way is a 5-minute pre-approval so you know your budget before you shop. Free and no obligation, and it leaves no trace on your credit file — an enquiry is only recorded once you choose to go ahead and your application is submitted to a lender. Get a quote through Asset Scanner Finance or call an Equifund broker directly on 1300 464 805.
Once you're pre-approved, browse the AssetScanner marketplace — trucks, excavators, tractors, forklifts, or everything — and cross-check pricing with our free valuation tool before you commit.
Related reading: Truck finance in Australia: how to get approved fast, Lease vs buy — which is right for your business, and situation-specific guides for owner-drivers, no-doc applicants, and second-chance finance.