What is equipment finance?

Equipment finance is a type of business lending that allows a company to acquire the machinery, vehicles or tools it needs without paying for them upfront. Instead, the business makes regular repayments over an agreed term, typically one to seven years, while using the asset to generate income. The asset itself usually serves as security for the loan.

How does equipment finance work in Australia?

In Australia, equipment finance is offered through banks, non-bank lenders, and specialist finance brokers. A lender provides funding for the purchase of a specific asset, and the business repays the amount plus interest over the loan term. Depending on the structure, chattel mortgage, hire purchase, or lease, ownership arrangements and tax treatment will vary. A finance broker can help identify the right lender and structure for your circumstances.

Is equipment finance a good idea for small businesses?

For many small businesses, equipment finance is a practical way to access essential assets without compromising cash flow. Rather than depleting reserves with a large upfront purchase, businesses can spread the cost while the asset generates revenue. It can also offer tax advantages depending on the finance structure and the business’s circumstances. As with any financial decision, it’s worth getting advice tailored to your situation.

What is the difference between equipment finance and a business loan?

The main difference is security and purpose. Equipment finance is tied to a specific asset, which acts as security for the loan. This typically means faster approval, lower deposit requirements, and potentially better interest rates. A traditional business loan is usually unsecured and can be used for a range of purposes, but tends to have stricter approval criteria and longer processing times. Equipment finance is generally the better fit when you have a specific asset in mind.

Can I get equipment finance if my business is relatively new?

Yes, though requirements vary between lenders. Many lenders prefer at least 6–12 months of trading history, but some are willing to consider newer businesses with a solid business plan and good personal credit. A finance broker with access to a wide lender panel can be particularly useful in this situation, as they can match your application to lenders who are most likely to approve it.

Does equipment finance affect cash flow?

Equipment finance is specifically designed to protect cash flow. By spreading the cost of an asset over time, businesses avoid the large upfront drain on their reserves. The regular repayment structure also makes it easier to forecast expenses. In many cases, the asset being financed generates enough additional income to offset the repayments, making the net impact on cash flow positive.

What assets are eligible for equipment finance in Australia?

Most business assets with a clear resale value are eligible. This includes commercial vehicles and trucks, construction and trade equipment, manufacturing machinery, medical and dental equipment, hospitality and kitchen equipment, IT systems and technology infrastructure, and agricultural equipment. Lenders generally require the asset to be used primarily for business purposes.

Should I use a broker for equipment finance?

Using a finance broker can save time and improve your chances of approval. Brokers have access to a panel of lenders and understand which ones are most likely to suit your business type, asset, and financial profile. They handle the application process on your behalf and can help you compare structures and rates. For small businesses in particular, a broker’s guidance on structuring the finance correctly can also make a meaningful difference to tax outcomes.

Asset Finance for Small Business Cash Flow

Q: How does asset finance help with cash flow?

Instead of paying for equipment upfront, asset finance allows you to spread the cost over time through regular repayments. This keeps your cash reserves available for wages, stock, and day-to-day business expenses.

Running a small business means juggling a lot of financial demands at once, wages, stock, overheads, unexpected expenses… all while trying to grow.

So when the time comes to upgrade equipment or purchase a new vehicle, spending a large lump sum upfront can put real pressure on your cash flow.

Asset & equipment finance can make a genuine difference to your business.

Rather than draining your cash reserves to make that purchase, it allows you to spread the cost of essential assets over time, keeping your working capital intact and your business moving forward.

The Cash Flow Challenge for Small Businesses

Cash flow is one of the biggest challenges for businesses.

A business can be generating good revenue and be profitable, and yet still find itself short on cash at the wrong moment.

Some of the common cashflow squeeze contributors include:
• Slow-paying clients or seasonal income patterns
• Unexpected repairs or equipment failures
• Growth opportunities that require upfront investment
• Wage and supplier payments that fall due before the income arrives

When a large equipment purchase is added to these pressures, it can stretch finances to the breaking point.

Asset finance offers a structured way to avoid that scenario.

What Is Asset and Equipment Finance?

Asset and equipment finance is a way for your business to borrow money to acquire the equipment, machinery or vehicles you need, without having to pay for it in full upfront.

Instead of using your cash reserves or depleting your credit line, you make regular repayments over an agreed term, typically between 1 and 7 years.

The asset itself serves as security, making this a secured lending option. This is important because a secured loan is typically regarded as less risky than and unsecured loan. And this in turn is important for your business, because it typically makes it both more accessible, and cheaper, than many unsecured options.

Common examples include financing for:

Trade and construction equipment (excavators, power tools, scaffolding)
Commercial vehicles/trucks
Hospitality equipment (commercial ovens, refrigeration, fit-out items)
Medical and dental equipment
IT systems, servers and technology infrastructure
Manufacturing and production machinery

How Asset Finance Preserves Your Cash Flow

The most direct benefit of asset and equipment finance is that the cash stays in your business.

Rather than paying $160,000 upfront for a piece of machinery, you pay a manageable amount every month over 4 or 5 years.

This means your working capital remains available for the day-to-day demands of running the business, while the asset begins to generate income from the moment it arrives.

Overall, the benefits of asset and equipment finance are:

You keep a financial buffer.
Unexpected costs come up in every business. By preserving your cash reserves, it means you have room to absorb these surprises without it becoming a financial crisis.
Repayments are predictable.
The fixed monthly payments make it easier to plan ahead. You know exactly what’s going out and when, which supports better cash flow forecasting.
The asset earns while you make repayments.
In most cases, the equipment or vehicle you’re financing is actively helping you to generate revenue from day one. This means the asset can contribute toward its own repayments.
You avoid depleting other credit. Using asset finance means you’re not eating into your overdraft facilities or business credit cards that you may need elsewhere.

Finance Structures Available to Small Businesses

There are various ways to structure asset finance.

Each structure comes with its own implications for ownership, tax, and cash flow.

The right option will depend on your own circumstances.

1. Chattel Mortgage

With a Chattel Mortgage, you own the asset from day one. The lender holds a mortgage over it until the repayments are complete.

This structure typically allows a business to claim back the GST upfront and may offer depreciation or instant asset write-off benefits.

This is a popular option for businesses that want ownership and potential tax advantages from the outset.

2. Hire Purchase

A Hire Purchase lets you make regular payments over an agreed term and take full ownership of the asset at the end.

This is a good fit for equipment you intend to use long-term and want to own outright.

3. Equipment Leasing

The main difference between Equipment Leasing and the other two structures above is that you don’t own the asset.

At the end of the leasing period, the asset is returned, allowing you to upgrade to new versions.

You may also be able to purchase the asset at a pre-agreed value.

Equipment leasing is a popular funding structure for equipment that becomes outdated quickly, like technology, because it can help your business use up-to-date tools without the long-term ownership commitment.

Each structure has its own tax treatment, and it’s worth speaking with your accountant to understand which best suits your situation.

The Finch Financial team can also walk you through the options as part of the broking process.

A Real-World Example

Let’s take a look at a small plumbing business in Hurstville. They have the opportunity to take on a new contract but they need a new service van and pipe-threading machine to take it on.

The cost of the van and machine is $75,000. Paying this upfront would wipe out most of their cash reserves.

Instead, they use equipment finance to spread the cost over five years. Their monthly repayments are manageable and comfortably covered by the income from the new contract.

Their cash flow remains healthy, they’ve taken on a better contract, and the business has grown, without the financial stress that a large upfront purchase would have caused.

Who Can Apply for Asset and Equipment Finance?

Asset and equipment finance is available to a wide range of Australian businesses, including:
Sole traders and partnerships
Companies and trusts
New businesses with some trading history
Established businesses looking to expand or upgrade

Because the asset itself provides security, approval requirements are generally more accessible than for unsecured business loans.

Lenders typically look for a minimum of 6-12 months of trading history, though at Finch Financial, we work with lenders who are willing to consider newer businesses.

Getting Started with Asset Finance in Sydney

If you’re a small business owner in Sydney or the St George area thinking about upgrading equipment, adding to your fleet or investing in new machinery, asset finance is worth exploring.

At Finch Financial, we specialise in helping Australian businesses find the right asset and equipment finance solution for their needs.

We work with a wide panel of lenders and guide you through every step of the process, from choosing the right structure to getting approved and settled quickly.

Contact us today to discuss your equipment finance needs and find out how we can help your business access the tools it needs, without putting your cash flow under pressure.

* Please note that this blog is not intended to give advice, but to share information.

Some of The Most Pressing Questions We Get Asked:

How does asset finance help with cash flow?

Instead of paying for equipment up front, asset finance allows you to spread the cost over time through regular repayments. This keeps your cash reserves available for wages, stock, and day-to-day business expenses.

What types of equipment can be financed?

Almost any business asset with a clear resale value can be financed. This includes vehicles, machinery, construction equipment, medical devices, hospitality equipment, and technology.

Do I need a deposit for equipment finance?

Deposit requirements vary by lender and asset type. Many equipment finance options are available with low or zero deposit requirements.

Is equipment finance available for small businesses in NSW?

Yes. Equipment and asset finance is available to small businesses across NSW, including sole traders, partnerships, and companies. Finch Financial works with lenders across a wide range of business sizes and industry types.

How quickly can I get approved?

Many asset finance applications are assessed within 24–48 hours, with funds typically available within 3-7 business days.

The Finch Financial team handles the application process on your behalf, which helps keep things moving quickly.

How Asset and Equipment Finance Helps Small Businesses Preserve Cash Flow