Introduction

Purchasing vehicles, farm machinery or business fitouts outright can be a serious cash drain—especially for small to medium-sized businesses in Australia. Equipment finance offers a practical solution, allowing you to spread the cost of assets over time while keeping your cash flow intact.

In this guide, we’ll break down how equipment finance works, which options are available, and what benefits you can expect under current Australian tax laws.

What Is Equipment Finance?

Equipment finance is a type of business funding used to acquire physical assets, such as trucks, tools, machinery, or office fit-outs. Rather than paying the full amount upfront, you finance the equipment and make regular repayments over an agreed term.

In most cases, the asset being financed serves as the security for the loan, making it easier for many businesses to access funding without needing additional collateral.

Common Types of Equipment Finance in Australia

There are four primary structures available under Australian lending law:

1. Chattel MortgageThe business owns the equipment from day one, while the lender holds a mortgage over it. Commonly used by businesses registered for GST, this option allows for input tax credits to be claimed upfront and interest and depreciation to be deductible.
2. Commercial Hire Purchase (CHP)The lender owns the equipment during the term and transfers ownership to the borrower after the final payment. Businesses may claim interest and depreciation.
3. Finance LeaseThe lender retains ownership of the asset, and the business leases it for an agreed term. Lease payments are usually tax-deductible, and a residual payment may apply at the end.
4. Rental or Operating LeaseSuitable for short-term use or rapidly depreciating equipment. The asset is returned at the end of the term unless a purchase is negotiated. Payments are usually fully deductible.

Each structure has different accounting, GST and tax treatment implications, so it’s worth seeking advice from your accountant or finance broker.

What Can Be Financed?

Centrepoint Finance works with businesses across industries to finance:

1. Commercial vehicles (utes, vans, trucks, etc.)
2. Construction and earthmoving equipment
3. Agricultural machinery and implements
4. Medical, dental and allied health fit-outs
5. Office technology and furniture
6. Manufacturing and production machinery

If the asset supports your business operations and has a definable lifespan, there’s likely a finance product that suits it.

Benefits of Equipment Finance

1. Preserve Cash FlowInstead of draining working capital, you can finance large purchases and keep funds available for wages, stock, and marketing.
2. Tax EfficiencyDepending on the finance type, businesses may be able to claim GST input credits, interest, depreciation, or lease payments as deductions.
3. Stay CompetitiveUpgrade your tools or machinery when needed without waiting to save the full amount.
4. Instant Asset Write-OffEligible businesses may take advantage of the instant asset write-off or temporary full expensing measures outlined by the Australian Taxation Office (ATO), subject to turnover thresholds and relevant dates. Always confirm eligibility with your accountant.

Who Is Eligible for Equipment Finance?

Eligibility criteria typically include:

1. A valid ABN
2. Evidence of trading history (or an acceptable start-up plan)
3. A quote or invoice from a supplier
4. Satisfactory credit history

In many cases, lenders offer low-doc or no-financials options, especially for established businesses with strong turnover and clean credit records.

What’s the Process?

Applying through a broker like Centrepoint Finance is generally faster and more flexible than going directly to a bank. Here’s what to expect:

1. Get an equipment quote from your supplier
2. Submit basic documents (ABN, ID, business history)
3. Select the most appropriate finance structure
4. Sign documents and take delivery of the asset
5. Begin regular repayments (monthly, seasonal or tailored)

You can also estimate repayments using our Equipment Finance Calculator.

When Should You Use Equipment Finance?

Equipment finance is ideal if:

1. You want to preserve working capital
2. You’re growing and need to scale up operations
3. You need to replace or upgrade old assets
4. You want to access potential tax benefits sooner
5. You’re seeking a smarter alternative to traditional business loans

Final Thoughts

Equipment finance is a flexible, tax-effective way to support your business growth. Whether you’re financing one vehicle or an entire fleet, working with an experienced broker helps you find the right structure, rate, and repayment terms.

At Centrepoint Finance, we partner with more than 40 lenders and tailor finance to your unique business needs. If you’re ready to grow without the upfront burden, we’re ready to help.

To explore your options, visit our Equipment Finance Services page or apply online today.