Equipment Finance Australia 2026
Own the gear, spread the cost. Chattel mortgage and equipment loans from 6.99% p.a. Compare 40+ Australian lenders.
TL;DR — Equipment Finance
- Secured loan that lets you buy equipment now and repay over time — typically structured as a chattel mortgage.
- Ownership transfers immediately; the lender holds a security interest until the loan is repaid.
- Rates start from 6.99% p.a. (May 2026) — sharper than unsecured business loans because the asset itself is security.
- Tax angle: depreciation on the asset and interest on the loan are both typically deductible (subject to ATO rules).
- LoanGorilla matches your equipment type, trading history and profile with 40+ Australian lenders.
Equipment Finance for Australian Businesses — Own the Gear, Spread the Cost
There's a specific case to be made for equipment finance over every other asset-funding structure, and it comes down to one word: ownership. When you finance equipment through a chattel mortgage or equipment loan, you own the asset from day one. The lender holds a security interest until the loan is repaid, then that interest is released and the equipment is unencumbered yours.
That matters for depreciation, for balance sheet treatment, for resale value, and for how you think about the long-term cost of running your business. LoanGorilla compares equipment finance from 40+ Australian lenders — banks, non-banks and specialist equipment lenders — with rates starting from 6.99% p.a. as of May 2026.
Check equipment finance options with LoanGorilla — free comparison, no credit score impact, takes 2 minutes.
Compare NowThis page covers equipment purchases specifically — the loan-based, ownership-at-end-of-term structure. If you're looking at lease arrangements, see Equipment Leasing. If you're financing vehicles specifically, see Business Car Loans. For the full landscape of asset-backed structures, see Asset Finance.
What Is Equipment Finance?
Equipment finance — often structured as a chattel mortgage or dedicated equipment loan — is a facility that lets your business buy equipment upfront while spreading the repayment over an agreed term. You become the legal owner of the asset the moment you take possession. The lender registers a security interest (called a charge or mortgage) over the equipment, which stays in place until you've cleared the loan.
This is fundamentally different from equipment leasing, where the lender retains ownership throughout. And it's different from hire-purchase, where ownership doesn't transfer until the final payment is made.
The equipment finance model suits assets with a long, stable useful life — machinery you expect to run for 5–10 years, production equipment central to your processes, or professional gear that doesn't date quickly. Once the loan is paid out, the asset contributes to your balance sheet as owned equipment, potentially supporting future borrowing or asset sales.
How Equipment Finance Works
1. You identify the equipment
New or used, from a dealer or private seller. You get a quote or invoice showing purchase price, specifications and condition.
2. LoanGorilla matches you with equipment-friendly lenders
Based on your business profile, the asset type and the loan amount. Different lenders specialise in different equipment categories.
3. You compare term structures
Typically 2–7 years, aligned to the equipment's expected useful life. Choose standard P&I repayments or include a balloon payment to reduce monthly obligations.
4. The lender settles with the supplier
Funds go directly to the dealer or vendor. Security is registered over the equipment on settlement.
5. You repay over the agreed term
Weekly, fortnightly or monthly. The equipment is in your business, generating value.
6. Security is released on final payment
The loan closes, the charge is lifted, and the equipment is completely yours.
The Tax Depreciation Angle
This is where equipment finance distinguishes itself from leasing, and it's worth understanding clearly before making a structure decision.
Equipment loan (chattel mortgage)
- You own the asset from day one
- Depreciation on the asset is deductible
- Interest component of repayments is deductible
- Instant asset write-off may apply (subject to ATO rules)
Finance or operating lease
- The lessor owns the asset
- Lease payments are deductible (operating lease)
- No depreciation claim on the asset itself
- Off-balance-sheet treatment in many cases
The difference in tax treatment can be significant for larger purchases, particularly when instant write-off incentives are in play. Always confirm the specifics with your accountant — but the ownership-based depreciation advantage of equipment loans is a genuine differentiator for businesses where tax efficiency matters.
What Equipment Can You Finance?
Equipment finance applies wherever the gear is clearly for business use and has a quantifiable value. LoanGorilla works across a wide range of asset categories:
Production & Manufacturing
CNC machines, lathes, industrial presses, food processing lines, packaging and printing equipment.
Construction & Trades
Smaller plant and site equipment, power tools, compressors, scaffolding and concrete mixers.
Healthcare & Medical
Diagnostic imaging, dental chairs, surgical and pathology equipment, allied health tools.
Hospitality & Food Service
Commercial kitchens, refrigeration, dishwashers, café equipment and espresso machines.
Fitness & Wellness
Cardio and strength equipment, functional training systems, recovery and treatment gear.
IT & Office Technology
Servers, networking, workstations, VOIP, security systems and high-volume printers.
Retail & POS
Point-of-sale systems and terminals, electronic displays, kiosks and payment automation.
When Equipment Finance Makes Sense
Choose equipment finance when
- The equipment has a long, predictable useful life (5+ years)
- You intend to use it until it's fully depreciated
- Ownership builds equity or underpins future refinancing
- The tax depreciation angle is meaningful for your business
- You want freedom to modify, customise, or sell the asset
- The asset holds its value reasonably well
Consider leasing instead when
- The equipment becomes obsolete in 2–4 years (tech, certain medical, AV)
- You want predictable upgrade cycles without recurring capital outlays
- Off-balance-sheet treatment is a priority
- You only need the equipment for a defined project or period
For the full comparison of ownership versus leasing structures, see Asset Finance.
Equipment Finance Rate Benchmarks (May 2026)
Equipment finance rates start from 6.99% p.a. for strong profiles and quality assets. Rates vary based on:
Asset type and age
New equipment from established manufacturers attracts sharper rates. Older or single-use assets may attract a premium.
Loan-to-value ratio (LVR)
Borrowing a high percentage of the asset's value increases lender risk and rate.
Business profile
Trading history (12+ months preferred, 2+ years for best rates), turnover and profitability all factor in.
Term
Longer terms may carry higher rates and increase total interest paid.
Balloon or residual
Including a balloon reduces monthly repayments but changes the risk profile and can affect rate.
Comparison rate
Includes fees and charges in a single annual figure — always request it.
Rate context: The RBA cash rate is 4.35% as of May 2026. Equipment finance rates are less directly correlated with RBA movements than variable-rate business loans, but broader credit market conditions still apply. Lenders are currently pricing certainty into fixed-rate offers — compare fixed and variable options when structuring longer-term equipment loans.
Illustrative — Balloon vs No Balloon
| Structure | Monthly | Balloon at term |
|---|---|---|
| $80,000 equipment loan, 5 years, no balloon | ~$1,580 | $0 |
| $80,000 equipment loan, 5 years, 25% balloon | ~$1,150 | $20,000 |
Illustrative only at ~7.5% p.a. The trade-off: lower monthly repayments now, higher total interest, plus a lump-sum obligation at term end.
Vehicle vs Equipment Finance vs Cash Purchase Comparator
See how vehicle finance, equipment finance and paying cash stack up on monthly outflow, total cost and the cash buffer left in your business.
The asset & your cash
Vehicle finance
Equipment finance
Cash purchase
If less than the asset price, you'll need to fund the rest from one of the finance options.
| Metric | Vehicle finance | Equipment finance | Cash purchase |
|---|---|---|---|
| Amount funded | $80,000 | $80,000 | $80,000 |
| Rate / term | 7.95% for 5 yrs | 8.49% for 5 yrs | N/A |
| Balloon at end | $16,000 | $0 | — |
| Estimated monthly outflow | $1,402 | $1,641 | $0 |
| Total interest | $20,129 | $18,456 | $0 |
| Total fees | $395 | $495 | $0 |
| Total cash to fund the asset | $100,524 | $98,951 | $80,000 |
| Cash remaining after purchase | $120,000 | $120,000 | $40,000 |
| Cash vs minimum buffer | Above buffer | Above buffer | Below buffer |
Want a deeper view with full amortisation, fee modelling and structure-by-structure cost analysis?
Open the full Equipment Finance Cost CalculatorPotential Drawbacks
Depreciation outpacing repayments
Stretch the term too long and the equipment may lose value faster than you're paying down the loan — creating negative equity if you need to sell or refinance early.
Obsolescence risk on fast-moving categories
For IT, medical imaging and certain specialist categories, technology moves quickly. Locking into ownership of gear that's outdated in three years can be costly. Leasing may be smarter for these categories.
Balloon commitments
A balloon reduces monthly repayments but creates a lump-sum obligation. If cash flow tightens near term end, or if resale value doesn't cover the balloon, you'll need a clear plan for the final payment.
Asset at risk on default
If you miss repayments, the lender can repossess the equipment. If that gear is central to revenue generation — a production machine, a diagnostic device — repossession can be operationally devastating.
Eligibility Snapshot
Most equipment finance lenders want 12+ months of trading history and an active ABN. The equipment itself often acts as security, which can offset a thinner credit file or shorter trading history compared to unsecured lending. Lenders will also assess the asset's age, condition, resale value, and how central it is to your business operations.
Ready to check your equipment finance options?
Compare equipment finance rates from 40+ lenders. Free comparison. No credit score impact. Takes 2 minutes.
Compare Equipment Finance NowImportant: The information on this page is general in nature and does not constitute financial advice. It does not take your individual circumstances into account. Always consult your accountant and a licensed credit adviser before making a borrowing decision.
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Equipment Finance FAQ's
Rates shown are subject to change. WARNING: Comparison rates are true only for the example given and may not include all fees and charges. Always read the lender's terms before applying.