Quick answer
Equipment finance funds the purchase of vehicles, machinery, tools or technology using the equipment itself as security, so you don't need property. The financier registers an interest over the asset until it's paid off. Because the asset backs the loan, equipment finance often preserves your unsecured borrowing capacity for other needs like working capital.
Key points
- The asset being bought is the security; no property or unrelated assets required.
- Keeps your unsecured capacity free for cash-flow needs.
- Assets with a strong resale market are easiest to finance.
- Eligible small businesses can use the $20,000 instant asset write-off, now permanent from 1 July 2026.
- Security
- The equipment itself
- Common assets
- Vehicles, machinery, tools, tech, fit-out items
- Property needed?
- No
Why is equipment finance different from other unsecured funding?
Strictly speaking, equipment finance isn’t unsecured. It’s secured, but by the equipment you’re buying, not by property. That’s what makes it so useful for owners without real estate. The financier’s comfort comes from the asset itself: if the loan isn’t repaid, the asset can be recovered and sold.
The Personal Property Securities Register, run by AFSA, is the national, searchable record of who holds a security interest over things other than land, from cars and trailers to plant, machinery and stock. When you finance equipment, the financier usually registers its interest on that register until the loan is paid.
What kinds of equipment can be financed?
The easiest assets to finance have a clear value and an active resale market:
| Asset type | Examples | How financiers view it |
|---|---|---|
| Vehicles | Utes, vans, trucks, trailers | Straightforward; strong resale market |
| Yellow goods and plant | Excavators, forklifts, compressors | Good, especially from recognised brands |
| Trade and workshop gear | Hoists, lathes, diagnostic tools | Good for new or near-new |
| Hospitality equipment | Coffee machines, ovens, cool rooms | Common; depends on removability |
| Medical and beauty equipment | Imaging, lasers, dental chairs | Common; specialised financiers exist |
| Technology | Computers, servers, POS systems | Shorter terms because value drops quickly |
Assets that are built into premises, such as custom joinery or electrical wiring, are harder to finance as equipment because they can’t be removed and resold. For those parts of a fit-out, an unsecured loan is often the better fit. See our page on fit-outs for tenants.
Why does equipment finance protect your unsecured capacity?
Every lender looks at your total commitments. But equipment finance and unsecured working capital are assessed differently. The equipment lender relies partly on the asset; the unsecured lender relies wholly on cash flow.
That means an owner who puts a $60,000 excavator on equipment finance, rather than using an unsecured loan, keeps more unsecured headroom for wages, stock or a quiet quarter. It’s one of the most practical ways to grow without property, and it’s a central rung in our funding ladder guide.
What about the instant asset write-off?
Since 1 July 2026, the ATO has treated the $20,000 threshold as a permanent feature rather than a year-by-year extension, for eligible small businesses turning over less than $10 million (aggregated). It lets eligible businesses immediately deduct the cost of qualifying assets under the threshold rather than depreciating them over time.
The write-off is a tax matter, not a financing rule, and your accountant should confirm eligibility. But it does shape buying decisions, and our guide to equipment and the permanent write-off goes through the planning.
Looking at a specific purchase? Tell us what you’re buying and a specialist will explain the options.
Which structure should you choose?
business.gov.au frames the basic choice as leasing versus buying. Leasing means renting equipment from a company that owns it; buying means you pay for and own it, potentially with a loan. Within that, the common structures are:
- Loan-style equipment finance (often called a chattel mortgage), where you own the asset from the start and the financier holds security until it’s paid off.
- Leases, where the financier owns the asset and you pay to use it, with options at the end.
- Rental or hire, for assets you only need for a while or want to upgrade regularly.
Each has different tax and accounting implications, which is why your accountant’s view matters. business.gov.au also notes that some finance includes a balloon or residual, a lump sum due at the end, which lowers regular repayments but needs planning.
What will the financier look at?
- The asset: type, age, condition, supplier and resale value.
- The business: time trading, turnover and account conduct.
- The deposit, if any, and whether a trade-in is involved.
- Your existing commitments, especially other equipment finance.
- The directors’ credit, once you decide to proceed.
Newer businesses often find equipment finance easier to get than unsecured working capital, because the asset reduces the lender’s risk.
What should you check before signing?
- Whether there’s a balloon or residual at the end, and how you’ll pay it.
- Who is responsible for insurance and maintenance.
- What happens if you want to upgrade or sell early.
- Whether a private-sale asset has been searched on the PPSR to confirm nothing is owing.
- The total amount repayable, not only the instalment.
A worked example (illustrative)
A small bakery in a leased shop wants a new deck oven, a mixer and a display fridge, quoted at about $48,000 from a dealer. It also wants $15,000 for new joinery and signage.
Financing the oven, mixer and fridge as equipment keeps them secured by themselves. The $15,000 of joinery and signage, which can’t be removed and resold easily, suits a small unsecured loan. Splitting the purchase this way often gets a better overall outcome than trying to fund the lot one way.
Let the equipment do the heavy lifting
If you’re buying something with a resale value, you may not need property at all. Enquiring doesn’t touch your credit file. We keep your details with one team, rather than circulating them to every lender going, and a real person walks you through the structures.
Please include accurate details of the asset (new or used, dealer or private, approximate cost) on the form. Those details decide which financier suits the asset. Check your equipment finance options.
Frequently asked questions
Can I finance second-hand equipment?
Often, yes, especially from dealers. Private sales and older equipment can be financed too, but financiers may ask for an inspection, a valuation or a PPSR search to confirm nothing is owing on it.
What happens at the end of the term?
It depends on the structure. With a loan-style arrangement, you own the asset once it's paid. With a lease, you may return it, upgrade it or pay a residual to keep it. Check before signing.
Can I finance a fit-out?
Removable items such as coffee machines, ovens and some shelving can often be financed as equipment. Built-in joinery and electrical work are harder because they can't easily be recovered, so an unsecured loan may suit those parts better.
Does the instant asset write-off apply to financed equipment?
The write-off is a tax deduction for eligible assets under the threshold, and how you pay for the asset doesn't automatically rule it out. Your accountant should confirm eligibility for your business.