Question 1

How does equipment finance actually work?

Accepted Answer

You get the asset now and pay it off in instalments instead of tying up cash — while the asset earns for you the whole time. Think of it like a mortgage for your gear: you own it from day one, the lender holds security over it, and you spread the cost across a term that suits your revenue. We arrange this as a chattel mortgage across a panel of commercial lenders.

Question 2

What is a chattel mortgage?

Accepted Answer

It's the standard commercial asset finance structure in Australia, and the one we arrange. Your business owns the asset immediately and the financier registers a charge over it as security. Because you own it, you can generally claim the GST input tax credit on the purchase and depreciate the asset over time — confirm the specifics with your accountant.

Question 3

Do you offer leasing or hire purchase?

Accepted Answer

No — we focus on chattel mortgages, because for the vast majority of commercial buyers they're cleaner, simpler and better on tax (you own the asset and get the GST and depreciation benefits). Leasing and hire purchase treat ownership and tax differently, which usually doesn't suit a business buying gear to keep.

Question 4

What interest rate should I expect?

Accepted Answer

We compare a panel of commercial lenders to get you a competitive rate. As a guide, realistic commercial rates currently sit in roughly the 6–9% range depending on the asset, its age, your ABN history and the security available — the sub-3% rates some people remember aren't around in this market. Watch for a quoted base rate with brokerage loaded on top, and always ask for the rate you'll actually pay.

Question 5

How much can I borrow for equipment finance?

Accepted Answer

It depends on the asset, your trading history and the structure you choose. Established businesses (2+ years ABN, GST registered, a director who owns property) can often access six-figure low-doc finance. The easiest way to get a feel is the calculator — work backwards from a monthly repayment you're comfortable with, and a balloon lets you finance more for the same repayment.

Question 6

Do I have to provide financials and bank statements?

Accepted Answer

Often not. If your ABN has been active for 2+ years, you're GST registered and a director owns property, low-doc finance frequently needs no tax returns, BAS or bank statements — sometimes into six figures. Newer businesses, larger amounts or certain assets may need a fuller submission, and occasionally full-doc gets you a sharper rate. We'll tell you which path is worth it.

Question 7

What is low-doc (or 'load-up') finance?

Accepted Answer

It's finance assessed on your trading history, credit profile and the director's property position rather than full financial statements. For an established ABN it's faster and far lighter on paperwork — it isn't a loophole, it's simply how a lot of commercial asset finance is written.

Question 8

What is a balloon, and should I use one?

Accepted Answer

A balloon (residual) is a lump sum deferred to the end of the term. Adding one lowers your monthly repayment and keeps more cash in the business — which is the whole point of financing rather than paying cash. The most common mistake we see is not using one. At the end of the term you refinance the balloon, pay it out, or roll into a new asset.

Question 9

What balloon size is typical?

Accepted Answer

Around 30% is a sensible balloon on most assets, and new vehicles can stretch to about 40%. The right figure depends on your cash flow and how long you plan to keep the asset — we'll talk it through so the end-of-term position is comfortable, not a shock.

Question 10

Is GST added to my monthly repayments?

Accepted Answer

No. On a chattel mortgage your business owns the asset from day one, so GST isn't added to the ongoing repayments — you generally claim the GST on the purchase price in your next BAS. Most lenders finance the GST-inclusive price; with some you can structure repayments so the GST portion is repaid after your input tax credit comes through. Confirm the detail with your accountant.

Question 11

Can I claim depreciation and the instant asset write-off?

Accepted Answer

Because you own the asset under a chattel mortgage, you can generally depreciate it, and the instant asset write-off may apply to eligible assets. Thresholds and rules change, so confirm what you're entitled to with your accountant — but the structure is set up so the tax treatment works in your favour.

Question 12

Can I raise cash against equipment I already own?

Accepted Answer

Often yes. If your business owns an asset outright, you can usually borrow against it — typically up to around 90% of its current market value, even years after you bought it — to free up working capital. There's also sale-and-buyback within six months of a purchase. Both are usually low-doc, and it's one of the most under-used moves in commercial finance.

Question 13

Should I get pre-approved before I buy?

Accepted Answer

Yes — it's the smart move, especially for vehicles and auctions. A pre-approval typically holds for around 90 days, so you can negotiate as a cash-equivalent buyer, sort a trade-in, and avoid being pushed onto dealer finance. Once you've found the asset, settlement is often same-day.

Question 14

Can I finance a used asset, and how old can it be?

Accepted Answer

Yes — used and higher-hour assets are part of what we do, including older trucks and machines that mainstream lenders won't touch. The asset's age affects which lender fits and the rate, but age alone rarely rules it out. New-from-a-dealer is simply the most straightforward.

Question 15

Can I finance a private sale or an auction purchase?

Accepted Answer

Yes. Dealer and auction purchases are simplest; private sales are fine too — they just need a quick inspection of the asset and a title (PPSR) check, which we handle. If you're buying at auction, get pre-approved beforehand so you can bid with confidence.

Question 16

Can I trade in my current vehicle or equipment?

Accepted Answer

Yes. A trade-in can go towards the purchase to reduce the amount financed — or, in many cases, you can take the trade-in value as cash back into the business and finance the full amount. A lot of owners don't realise that second option exists.

Question 17

Can I pay the finance out early?

Accepted Answer

Usually yes, though most lenders charge an early-exit fee, so it's worth understanding upfront rather than fixating on the headline rate. In practice, because you're not normally planning to sell the asset, paying out early often isn't the concern people expect. We'll explain the exit terms before you commit.

Question 18

Can a new business or startup get equipment finance?

Accepted Answer

It's harder than for an established ABN, but not impossible — a director with property, a reasonable deposit and clean credit opens up options, and some lenders specifically consider newer businesses. Tell us your situation and we'll be straight about what's realistic.

Question 19

Do I need a deposit?

Accepted Answer

Often no deposit is needed for an established business buying a standard asset, particularly new from a dealer. Newer businesses, older or specialised assets, or larger amounts may need a contribution. We'll let you know before you start so there are no surprises.

Question 20

How fast can it settle?

Accepted Answer

Low-doc deals on straightforward assets can often be approved within 24–48 hours, and once you've found the asset, settlement can be same-day. Get pre-qualified first and the whole process is much faster when you're ready to buy.

Question 21

Why finance equipment if I have the cash?

Accepted Answer

Leaving cash in the business protects your liquidity for the things you can't predict — a slow quarter, a big opportunity, a repair bill. The asset earns either way; financing it (ideally with a balloon) keeps the cash on hand. For most growing businesses, that's the stronger position.

Equipment finance questions, answered straight

Who it's for

Plain answers, but always check the tax with your accountant

Talk to a specialist

Work it out backwards.

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