Asset finance
Fund vehicles, equipment or machinery over 2 to 7 years, own it at the end with a chattel mortgage, or hand it back with a finance lease. Which one fits depends on the asset, not just the rate.
General information only
Asset finance funds a specific vehicle, piece of equipment or machinery, using the asset itself as security rather than property. Repayments are spread over the asset’s useful life (typically 2 to 7 years), so you’re not tying up cash buying it outright.
The first real decision isn’t the rate. It’s whether you want to own the asset at the end of the term. The answer changes with what you’re financing.
What’s the difference between a chattel mortgage and a finance lease?
A chattel mortgage means you own the asset from day one and it sits on your balance sheet, with the lender holding a mortgage over it until you’ve paid it off. A finance lease means the lender owns the asset and you pay to use it, usually with the option to hand it back, extend, or buy it out at the end.
Ownership has a tax answer as well as a practical one. Because a chattel mortgage makes you the owner from delivery, the asset is yours to depreciate and, where it qualifies, to write off. Under the ATO’s instant asset write-off the limit has been $20,000 for an asset first used or installed ready for use on or after 1 July 2023, it applies per asset rather than per business, and from 1 July 2026 that limit is permanent for small businesses with aggregated turnover under $10 million.
Two things to get right before year end. First, the write-off follows ownership, not funding. Finance the asset with a chattel mortgage and the deduction is yours, even though the lender holds security. Take a finance lease and the financier owns it, so you deduct the rental instead. Second, the clock runs from when the asset is first used or installed ready for use, not from when you signed or when the lender settled. An asset ordered in June and delivered in July falls into the following income year. It’s the most common way a planned deduction slips a year.
General information, not tax advice. Eligibility depends on aggregated turnover including affiliates and connected entities, the purchase date, the date the asset was first used or installed ready for use, and the cost being under the limit. Confirm your own position with your accountant.
- 01Say you’re financing a coffee machine on a two-year lease. You hand it back at the end and get a newer model, instead of owning a machine with a shrinking resale value. A lease usually suits an asset that ages out fast.
- 02Now say you’re financing a truck and trailer for a five-year contract. Repayments sit well below what the contract earns you, and a truck and trailer still has strong resale value at the end, so owning it is the smarter play. A chattel mortgage usually suits an asset worth holding onto.
- 03Balloon payments on either structure help cashflow during the term, but the balloon still has to be paid out at the end. Balloon refinance products exist in the market, and if the asset doesn’t qualify for one, a term loan or overdraft can often cover the payout instead. Be especially careful with balloons of 30% or more on an asset you plan to keep.
- 04Rate isn’t always the deciding factor. Early payout penalties (or the lack of them) and the credit limit increases some lenders offer after 12 months of clean repayments can matter more than a slightly cheaper headline rate.
What can you finance?
Almost anything a business buys to use rather than resell, but lenders sort assets into tiers and price them differently. The dividing line is simple: can the lender take it back and sell it? That single question explains most of what follows.
| Asset | How lenders treat it |
|---|---|
| Vehicles, trucks and trailers | The easiest category. An active resale market and a clear serial number, so rates are sharpest here and terms run longest. |
| Yellow goods, forklifts and machinery | Also straightforward. Age and hours matter more than for vehicles, and some lenders cap the asset age at settlement rather than at application. |
| Manufacturing and processing equipment | Fine when it is a recognised make that another operator would buy. Highly specialised or custom-built gear is harder, because the resale market is one or two buyers nationally. |
| IT, point-of-sale and office technology | Short terms, usually two to three years, because the asset depreciates faster than the loan would otherwise amortise. |
| Solar and energy systems | Financeable, but treated closer to a fitout once installed, since removing it damages the value of what it is attached to. |
| Warehouse racking and materials handling | Racking is removable and does hold resale value, so it is usually financeable as a genuine asset, unlike most fitout work. |
| Office, retail and hospitality fitouts | The exception worth understanding. See below. |
Is equipment finance the same as asset finance?
Close enough that lenders use the terms interchangeably, but not identical. Asset finance is the umbrella term: anything identifiable you can register a security interest over, which includes vehicles, trucks, machinery, plant and some fitout. Equipment finance usually means the narrower slice that isn’t a road vehicle: machinery, plant, kitchen, medical, IT and workshop gear.
The structures are the same either way. A chattel mortgage, a finance lease or a commercial hire purchase can each fund equipment, and the choice between them turns on whether you want to own the asset at the end, not on what the lender calls the product. Machinery finance, equipment loan and plant finance are all the same conversation.
Where the naming bites is when you compare quotes. One lender’s equipment loan and another’s chattel mortgage can be the same contract at different prices, so comparing the structure and the total cost over the term tells you far more than comparing the product name.
Why are fitouts financed differently?
Because a fitout isn’t really an asset from the lender’s point of view. Once the joinery is installed, the walls are up and the cool room is plumbed in, none of it can be repossessed and resold. It’s attached to premises you most likely lease. A truck can be picked up from a yard. A shopfit can’t.
So fitout funding usually goes one of three ways, and which one you get has more to do with your business than with the fitout:
- 01Split the invoice. The removable parts (racking, appliances, commercial kitchen equipment, POS hardware) go on asset finance at asset-finance pricing. The building work doesn’t. It’s the most useful thing a broker does on a fitout, and it needs doing before the supplier issues one combined invoice.
- 02Fund the rest unsecured. The fixed-out portion is funded against the business rather than the asset, usually through an unsecured business loan. It prices higher, because there’s nothing behind it but your trading history.
- 03Use a facility you already have. If the fitout is staged over months, a line of credit or overdraft often costs less than a term facility drawn in full on day one and sitting idle while trades finish.
The practical advice: get the quote itemised before anyone finances anything. A single line reading “fitout: $180,000” has to be funded the expensive way in full. The same job split into equipment, appliances and building work can often be part-funded at asset-finance rates, and the difference over a five-year term isn’t small.
Can you finance an older asset?
Yes. Some lenders on our panel now have no age restrictions at all. What does change is the rate: the newer the asset, the cheaper the rate tends to be, because a newer asset carries stronger resale liquidity if the lender ever needed to recover it. An older asset isn’t excluded. It’s just priced differently.
Can a startup get asset finance?
Yes, with the right supporting information. A signed works contract and clear cashflow forecasts from your accountant are usually enough to get a startup considered, even without years of trading history behind it. Lenders want to see the revenue case for the asset, not necessarily a long track record. See our startup business loans guide for the other paths startups typically use.
Terms are matched to how long the asset will earn its keep. A laptop and a prime mover don’t belong on the same structure.
How much can you borrow, and what does the application need?
There’s no hard ceiling. Facility size scales with the asset and the business case behind it. Above $250,000, expect more application requirements: full financial statements, and a clear justification of why the business needs that specific asset at that price. Below that threshold, applications typically move faster with less documentation. Our asset finance calculator lets you model repayments against the asset price and structure before you apply.
| Term | Typically 2 to 7 years, matched to the asset’s useful life |
| Security | The asset itself, not property, chattel mortgage or finance lease |
| Asset age | No hard cut-off with some lenders; newer assets usually price cheaper |
| Above $250,000 | Full financial statements and a clear justification for the purchase |
Equifax’s June 2026 data, while large business demand for the same rose 17.1%.
Sourced data: Equifax
Is asset finance demand growing or shrinking right now?
It depends heavily on who’s asking. Equifax’s Business Market Pulse for June 2026 recorded large business asset finance demand up 17.1% year-on-year over the same period SMEs pulled back, one of the widest gaps in the report.
That split doesn’t mean SMEs have stopped buying equipment or vehicles. More often it means owners are holding off, extending the life of what they’re using, or getting knocked back where a large business with cleaner financials wouldn’t be. If you’re in the group being cautious rather than the group getting approved, that’s usually a structuring and lender-selection problem rather than a real no. Check that before you shelve a purchase.
Source: Equifax Business Market Pulse, June 2026, via Australian Broker.
The primary source puts a sharper number on it. ABS Lending Indicators, collected by APRA from lenders covering 95% of business credit outstanding, records $20,755 million in new small business fixed-term commitments for plant and equipment finance across 2025-26. That’s essentially flat, up 0.5% on the year before. Medium business plant and equipment finance fell 11.8% over the same twelve months.
| New fixed-term commitments, 2025–26 | Small business | Medium business |
|---|---|---|
| Plant and equipment finance | $20,755m | $8,346m |
| Working capital | $2,836m | $13,918m |
| Total excluding refinancing | $58,660m | $127,771m |
| Plant and equipment as a share of the total | 35.4% | 6.5% |
Source: ABS Lending Indicators, tables 30 and 32, original series, financial year to June 2026. ABS counts a business as small where the lender’s exposure is under $1 million and turnover is under $50 million.
Look at the last row. Plant and equipment is 35.4% of everything small businesses borrow on fixed terms, against 6.5% for medium businesses. Equipment finance isn’t a scaled-down version of what bigger businesses do. It’s disproportionately the small business credit product, and working capital runs the other way entirely.
So the softness in SME demand is real, but it isn’t a retreat from equipment finance. Small business borrowing for plant and equipment held its ground in a year when medium business borrowing for the same thing fell almost 12%.
Why work with a broker instead of comparing lenders yourself?
Because the cheapest rate on the page isn’t always the right structure for your business case. Payout terms, balloon refinance eligibility, age limits: working through them before you sign is where a broker earns their place. (More on how a business loan broker works.)
Two things people get wrong about asset finance
The cheapest rate isn’t always the right fit
Shaving a fraction off the rate is the easy comparison. How the structure fits the asset and the deal usually matters more.
Age and startup status don’t automatically rule you out
Some lenders now finance assets with no age cut-off, and a startup with a signed works contract and clear cashflow forecasts can still qualify. You’re priced differently, not excluded.
When is asset finance not the right call?
If what you need is general working capital rather than funding for a specific vehicle, piece of equipment or machinery, asset finance isn’t the right tool. A term loan or line of credit fits better. Pause, too, before taking a balloon if you don’t have a plan for the payout. Find out whether balloon refinance will be available for that asset before you commit.
If that sounds like you, say so on the call and we’ll point you somewhere better.
Compare this against
Not sure asset finance is the right shape?
Need cash in hand rather than funding for one asset?
A term loan gives you a lump sum you control, not a facility tied to a specific purchase.
See Term loans →Funding stock or inventory rather than equipment?
Trade finance is built around a supplier purchase, not a piece of equipment or a vehicle.
See Trade finance →Want funding without tying it to one asset?
An unsecured loan is assessed on the business, not secured against the thing you’re buying.
See Unsecured business loans →How do you get asset finance?
Tell us the asset, roughly what it costs and your ABN, and we take it to the panel without a formal application or a credit check at that stage. We’ll walk through chattel mortgage versus finance lease and whether a balloon structure suits the asset before you commit to either.
Want the numbers first? Try the asset finance calculator →
Run a transport or logistics business? See how finance bridges 30-90 day terms →
Run a trades or construction business? See how finance differs by construction type →
Run a hospitality or retail business? See how finance works in this sector →
New to working with a broker? See how a business loan broker works →
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.