Equipment finance lets a business acquire the vehicles, tools, machinery, or technology it needs without paying the full cost upfront. Instead of draining working capital on a single purchase, the business spreads the cost over the useful life of the asset while it earns revenue.
For many Australian businesses, this is a smarter use of cash than paying outright. It keeps working capital free for wages, stock, and day-to-day operations, and the asset itself often acts as the security for the facility.
Blackcube Capital helps Australian businesses compare equipment and asset finance options. You can start an enquiry here if you want to work out the right structure for a purchase you are planning.
Business Funding Support
Planning an equipment purchase?
Share the asset details and your business basics. We can help compare equipment and asset finance structures so the purchase fits your cash flow.
What equipment finance actually is
Equipment finance, sometimes called asset finance, is funding used specifically to acquire a business asset. Because the asset can usually be used as security, these facilities are often easier to structure than a fully unsecured loan of the same size, and they can suit a wide range of purchases.
The common uses include vehicles and trucks, trailers, plant and machinery, manufacturing equipment, kitchen and hospitality fit-outs, medical and dental equipment, IT hardware, and tools of trade. If the asset is essential to how the business earns money, it can often be financed.
- Vehicles, trucks, trailers, and utes
- Plant, machinery, and manufacturing equipment
- Hospitality fit-outs and commercial kitchen equipment
- Medical, dental, and allied health equipment
- IT hardware, tools, and technology
The main types of equipment finance
There are a few standard structures, and the right one depends on tax treatment, whether you want to own the asset at the end, and how you prefer to account for it. It is worth understanding the differences before you sign, and confirming the tax position with your accountant.
A chattel mortgage means the business owns the asset from the start and the lender holds security over it. A finance lease means the lender owns the asset and the business leases it. A hire purchase sits between the two, with ownership transferring after the final payment. A rental or operating lease is more like ongoing hire, often used for assets that date quickly, such as technology.
- Chattel mortgage: you own the asset, lender holds security
- Finance lease: lender owns the asset, you lease it
- Hire purchase: ownership transfers after the final payment
- Rental or operating lease: ongoing hire, common for fast-ageing assets
What lenders assess for equipment finance
Because the asset provides security, equipment finance can be more accessible than unsecured funding, but lenders still assess the business and the asset together. They look at the type, age, and resale value of the asset, alongside the strength of the business.
For newer or standard assets from established suppliers, some lenders offer low-doc options where limited financials are required. Older, specialised, or private-sale assets usually attract closer review because they are harder to value and resell.
- Type, age, and resale value of the asset
- Business revenue, trading history, and bank statement conduct
- Whether the purchase is from a dealer or a private sale
- Credit profile and any existing finance commitments
Equipment finance versus using working capital
A common question is whether to finance an asset or simply pay cash. Paying cash avoids interest, but it also ties up capital that could cover wages, stock, or a downturn. Financing spreads the cost so the asset can pay for itself as it generates revenue.
If the asset directly drives income, such as a truck for a transport business or an oven for a bakery, financing often makes sense because the repayments are matched against the earnings the asset produces. If you also need general working capital, compare this with an unsecured business loan or a line of credit.
How to prepare an equipment finance application
The cleanest applications move fastest. Start with the details of the asset, ideally a supplier invoice or quote, along with your recent business bank statements and ABN or company details. If it is a private sale or an older asset, expect the lender to ask for more.
Being clear on why the asset matters to the business also helps. A lender assessing risk wants to see that the purchase supports revenue rather than being a speculative buy. For a general checklist, see what documents you need for business funding.
Frequently asked questions
What can equipment finance be used for?
It can be used to acquire vehicles, trucks, plant, machinery, hospitality fit-outs, medical equipment, IT hardware, and other business assets. If the asset is essential to how the business earns, it can often be financed.
Do I need a deposit for equipment finance?
Not always. Many facilities can be structured with no deposit, particularly for standard assets from dealers. A deposit may help pricing or approval for older or private-sale assets.
Can I finance a used or private-sale asset?
Often yes, but used and private-sale assets usually attract closer review because they are harder to value and resell. Newer assets from established suppliers are generally simpler to finance.
Is equipment finance easier to get than an unsecured loan?
It can be, because the asset itself acts as security. The business still needs to demonstrate it can service the repayments, but the security often makes the facility more accessible.
Business Funding Support
Planning an equipment purchase?
Share the asset details and your business basics. We can help compare equipment and asset finance structures so the purchase fits your cash flow.