Ask three lenders to price the same excavator and you can get three noticeably different answers. Equipment finance is not priced off a single published rate card — it is priced off the asset, the structure, the age of the business and the strength of the application. This page explains what actually sets the number, what sits on top of it in fees, and how to compare two quotes that look similar but aren’t.
If you want a repayment estimate first, use the equipment finance calculator and come back here to understand what the rate is made of.
Quick answer
Equipment finance is usually written as a fixed-rate, fixed-term facility secured against the asset. Because it is secured, it typically prices below unsecured business lending. The rate you are offered depends mostly on six things: the asset type and age, the term, the deposit or trade-in, whether the finance is in the business name with an ABN, the strength of the application (full-doc vs low-doc), and which lender ends up funding it.
Rates move with the market, so we do not publish a fixed rate on this page. What we can do is show you exactly which levers change it.
What sets your rate
The asset itself. Lenders price against what the equipment is worth if they ever have to recover it. Standard, liquid, widely traded assets — excavators, prime movers, trucks, common workshop plant — price better than specialised or purpose-built gear with a thin resale market.
Asset age. New equipment generally prices best. Used equipment can price very competitively too, but most lenders have an age limit at the end of the term, not the start — a ten-year-old machine on a five-year term is being assessed as a fifteen-year-old machine at the end. See used equipment finance.
Term. Longer terms lower the repayment but raise total interest. Lenders also match term to the asset’s realistic working life.
Deposit or trade-in. Contributing equity reduces the lender’s exposure and often improves pricing. Many equipment deals are still written with no deposit where the asset and the business are strong.
Business structure and ABN. Finance in a company or trust name with an active ABN and GST registration is assessed as commercial lending. That is what opens up chattel mortgage and hire purchase structures — and the associated tax treatment. See ABN car finance and chattel mortgage.
Documentation level. Full-doc applications with financials generally price better than low-doc applications supported by bank statements and a declaration. Low-doc buys speed and simplicity; it usually costs a little more.
Credit profile and trading history. Time in business, ATO position, existing facilities and director credit history all feed the assessment.
The cost components — beyond the rate
Two quotes at the same rate can cost meaningfully different amounts. Look for all of these:
| Component | What it is | Where it hides |
|---|---|---|
| Interest rate | The cost of the money, usually fixed for the term | The headline |
| Establishment / application fee | One-off cost to set up the facility | Sometimes capitalised into the loan |
| Monthly account fee | Ongoing administration charge | Small per month, real over five years |
| Brokerage / origination | Fee for arranging the facility | Must be disclosed |
| PPSR registration | Registering the lender’s security interest | Government charge |
| Balloon / residual | Lump sum owed at end of term | Lowers repayments, raises total interest |
| Early termination cost | Payout figure if you finish early | Read before you sign |
| Documentation fee | Preparation of loan documents | Varies by lender |
The number to compare is the total cost over the full term, including the balloon, not the monthly repayment in isolation.
How structure changes the cost
| Structure | How it is priced | Cost characteristics | Best suited to |
|---|---|---|---|
| Chattel mortgage | Fixed rate, you own the asset from day one, lender takes security | Typically the sharpest pricing for ABN holders; GST on the purchase price usually claimable in the next BAS (check with your accountant) | Businesses wanting ownership and depreciation |
| Commercial hire purchase | Fixed rate, lender owns until final payment | Similar pricing profile; ownership transfers at the end | Businesses preferring hire-purchase treatment |
| Finance lease / rental | Fixed rental payments over the term | Payments may be fully deductible as rent; no ownership during term | Businesses prioritising cash flow and off-book simplicity |
| Low-doc equipment finance | Fixed rate, reduced documentation | Slightly higher pricing for the reduced verification | Newer or self-employed businesses without current financials |
More detail: chattel mortgage · commercial hire purchase · how equipment finance works
The balloon trade-off
A balloon (residual) parked at the end of the term lowers your regular repayment, which helps cash flow. It also means you are paying interest on a larger average balance across the term, so the total interest is higher — and you need a plan for the balloon when it lands: pay it, refinance it, or sell the asset.
Balloons make most sense where the asset holds value well and you expect to upgrade at end of term. They make least sense where the asset depreciates faster than the balance reduces, because you can end up owing more than the equipment is worth.
Model a few combinations in the equipment finance calculator or the chattel mortgage calculator before you commit.
How to compare two quotes properly
- Same term, same balloon. Otherwise you are not comparing anything.
- Total repayments over the term, plus the balloon, plus all fees — one number.
- Check the fee schedule, not just the rate.
- Check the early payout basis if there is any chance you will upgrade early.
- Check what the security is. Some facilities take additional security beyond the asset.
- Check the settlement timeframe. A sharper rate that misses the supplier’s deadline is not sharper.
Reducing what you pay
- Buy a standard, liquid asset where you have the choice.
- Contribute a deposit or trade-in if cash flow allows.
- Match the term to the working life of the asset, not to the lowest possible repayment.
- Get the application clean: current financials, ATO up to date, ABN and GST details correct.
- Use a broker with a wide lender panel rather than accepting the dealer’s first offer — the funder matters as much as the structure.
Equipment finance sits within our broader asset finance range, alongside business loans and finance and unsecured business loans.
FAQs
What are current equipment finance rates in Australia?
There is no single published rate. Equipment finance is priced per deal against the asset, the structure, the term, the documentation level and the borrower’s profile, and pricing moves with the market. The most reliable way to know your rate is a quote based on the actual equipment and your business details.
Is equipment finance cheaper than a business loan?
Usually, yes — because it is secured against the equipment, whereas an unsecured business loan has no asset behind it. The trade-off is that the funds must go to the asset and the lender holds security over it.
Does a deposit lower my equipment finance rate?
It can. A deposit or trade-in reduces the lender’s exposure relative to the asset value, which can improve both the pricing and the likelihood of approval. Many equipment deals are still written with no deposit where the asset and business are strong.
Are equipment finance fees negotiable?
Some are. Establishment and brokerage fees vary between lenders and deals; government charges such as PPSR registration do not. Always ask for the full fee schedule in writing alongside the rate.
Does a balloon payment make equipment finance cheaper?
It lowers the regular repayment but increases the total interest paid, because more of the balance stays outstanding for longer. It is a cash-flow tool, not a discount.
Can I get equipment finance without financials?
Often yes, through low-doc equipment finance assessed on bank statements and a declaration rather than full financials. Expect pricing to sit a little above a full-doc equivalent.
Is the interest on equipment finance tax deductible?
Interest on finance used for business purposes is generally deductible, and the deductibility of the payments themselves depends on the structure you choose. Treatment varies — confirm with your accountant.
Want a real rate instead of an estimate?
Tell us what you are buying and we will price it across our lender panel — including low-doc and ABN-friendly funders.
Apply now · or run the numbers first with the equipment finance calculator
This article is general information only and does not constitute credit, financial or tax advice. Any rates, fees or repayments referred to are examples only, are not quotes, and are subject to change. Tradie Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees. Tax treatment depends on your circumstances — confirm with your accountant.
Written and reviewed by the Finance Director at Tradie Finance.
Equipment and asset finance is priced against the asset. For general business lending rather than an asset purchase, see business loan interest rates.