What Is a Commercial Equipment Loan? A Comprehensive Guide for Australian Businesses

Running a business often means needing new equipment. Paying cash upfront can hurt your cash flow. That’s where a commercial equipment loan helps.

Also known as equipment finance or asset finance, it lets you spread the cost of essential assets over time.

What Exactly Is a Commercial Equipment Loan?

It is a secured business loan used to buy or lease income-producing equipment. The lender pays the supplier directly. You repay in fixed monthly instalments, usually over 1–7 years.

The equipment itself acts as security. This keeps interest rates lower than unsecured loans.

The Main Types Available in Australia

Structure	Who Owns It?	GST Treatment	Tax Benefits	Best For
Chattel Mortgage	You own it from day one	Claim full GST on next BAS	Interest + depreciation deductible	Most GST-registered businesses
Commercial Hire Purchase	Lender owns until final payment	GST spread over repayments	Full repayments (excl. GST) deductible	Lower upfront GST impact
Finance Lease	Lender owns, you use it	GST on each lease payment	Lease payments fully deductible	Off-balance-sheet funding
Operating Lease/Rental	Lender always owns	GST on rental payments	Rental payments fully deductible	Short-term or fast-obsolete assets

In 2025–26, chattel mortgage is still the most popular choice for GST-registered businesses.

Key Benefits

You preserve working capital for daily operations and growth.

You can claim the full GST amount back on your next BAS (often tens of thousands returned quickly).

Interest and depreciation are tax-deductible.

Fixed rates give certainty, even if the RBA moves rates.

Terms can include balloons, seasonal payments, or no deposit.

Approvals are often same-day with specialist lenders.

What Can You Finance?

Almost any income-producing asset qualifies:

Trucks, utes, trailers and heavy machinery
Medical and dental equipment
Café and restaurant fit-outs
Manufacturing plant
IT hardware and software
Farming and agricultural equipment
Solar systems and renewable energy assets

Both new and used equipment (including private-sale) can usually be financed.

Eligibility Requirements

You typically need:

An active ABN (minimum 6–12 months trading)
GST registration (preferred)
Clean or reasonable credit history
Proof the asset will generate income

Start-ups and businesses with past credit issues can still be approved, often with a small deposit or slightly higher rate.

Current Costs (2025–26)

Interest rates: 6.5 % – 12 % p.a. fixed

Establishment fees: $0 – $1,500

Monthly fees: $0 – $55

Broker fees: Usually $0 (paid by the lender)

Using an experienced broker costs you nothing and usually saves you money.

The Simple Application Process

Get quotes for the equipment.
Apply online (5–10 minutes).
Supply ABN, licence, recent financials and the invoice.
Receive conditional approval (often same day).
Sign documents and pay any deposit.
The lender pays the supplier directly.
You take delivery and start repayments.

Leading Lenders in 2025

Major banks: CBA, Westpac, NAB, ANZ

Specialists: Macquarie, BOQ Specialist, Metro Finance

Non-bank/private: Shift, Lumi, Judo, ScotPac, Grenke

A good broker gives you access to all of them in one place.

Frequently Asked Questions

Should I pay cash or finance?

Finance is usually more tax-effective and keeps cash in the business.

Do I need a deposit?

No — 100 % finance is common, especially on new equipment.

What happens at the end?

With a chattel mortgage you already own it. With other structures you pay or refinance the balloon and take ownership.

Are Instant Asset Write-Off benefits still available?

Thresholds change each year — speak to your accountant for the latest rules.

Ready to Get Started?

A commercial equipment loan is one of the smartest ways Australian businesses grow without draining cash reserves.

At Finance Finance Finance, our accredited brokers compare over 40 lenders to find you the lowest rate and best structure — at no cost to you.