Asset finance: borrowing against the things your business runs on

A transport operator with eight trucks, four of them fully paid off, is sitting on a form of capital most people never think to use. So is a civil contractor whose yard is full of owned plant, or a farmer with unencumbered headers and tractors. Asset finance is usually described as a way to buy things. It’s just as useful as a way to put the value of what you already own back to work.

What does asset finance cover?

Think of it as any business lending where a tangible asset, other than real estate, is the main security. In practice that splits into three jobs:

1. Buying an asset. A new or used vehicle, truck, trailer, machine or piece of plant, financed over a term that suits its working life. This is the overlap with equipment finance and commercial vehicle finance.
2. Refinancing an asset. Moving an existing loan to a different lender for a better structure, a lower repayment or to consolidate several contracts.
3. Releasing value. Borrowing against owned, unencumbered assets, or selling them to a financier and leasing them back, to free up working capital. See sale and leaseback for how that variant works.

In every case the lender lodges its interest on the PPSR (the Commonwealth register covering security over anything that isn’t land), and the asset’s value shapes how much it will advance.

Who provides asset finance in Australia?

There are three broad channels, and each has a different sweet spot.

Funder type	Strengths	Typical limits
Banks	Often the cheapest money; strong for established businesses with clean financials and existing banking	Tighter on older assets, private sales and weaker credit
Captive (manufacturer) financiers	Know their own equipment well; promotional deals on new stock; sometimes flexible seasonal repayments	Usually limited to their own brand, often new or dealer-sold only
Independent non-bank financiers	Broad asset appetite including used, private-sale and older gear; quicker decisions; more room for credit blemishes	Usually cost more than a bank

Banks deserve a first look. When your business fits their criteria, their offer is often the one to beat. If the bank says no, or won’t fund the specific asset, the non-bank market is deep: our directory includes asset specialists such as Westlawn Finance, Dynamoney and Azora Finance, and manufacturer arms like Volvo Financial Services.

A trap with dealer finance offers

Subsidised finance on new vehicles and machinery can be genuinely good value. The catch is that the subsidy has to come from somewhere, and sometimes it comes from the price. A dealer may offer either a sharp finance deal or a cash discount, but not both.

The fix is simple: ask for the price you’d pay if you arranged your own finance, then compare the total cost of each route in dollars over the full term. Occasionally the “expensive” outside finance plus the discounted price comes out ahead.

Releasing cash from assets you already own

This is the part of asset finance owners overlook most. If you own vehicles or plant outright, or owe much less than they’re worth, a financier may advance against them.

How lenders approach it

• A valuation or inspection confirms the asset’s current market value.
• The advance is a portion of that value, smaller for older or specialised gear.
• The term reflects how much working life the asset has left.
• The lender wants to know what the money is for. Working capital, a tax bill, a deposit on another asset or consolidating expensive short-term debt are all common.

Where a bank’s GSA comes in. Many businesses with bank lending have signed a general security agreement, which gives the bank security over all present and future business assets. If you try to refinance an owned truck with a different lender, that new lender will want the bank to release the truck or agree that the new lender ranks first. Ask your bank early, because this step can take longer than the approval itself.

For new purchases the position is friendlier. A financier that registers a purchase money security interest within the required time usually ranks ahead of an earlier all-assets GSA for the asset it funded. The general security agreement entry in our glossary explains the mechanics.

Owned plant sitting in the yard and a cash flow gap in the account? Tell us what you own and we’ll look at whether it can help. A minute’s work, and no credit check when you enquire.

Using an asset limit when you’re growing

Businesses adding vehicles or machines through the year can ask for an asset finance facility, sometimes called a master or umbrella limit. The lender assesses the business once and approves a ceiling. Each purchase is then written as its own contract under that limit, with paperwork measured in days rather than weeks.

This suits fleet operators, hire companies and contractors gearing up for a known pipeline. It also gives you buying power at auctions and private sales, where speed decides who gets the asset.

What lenders check

What’s assessed	Detail
The asset	Type, age, condition, hours or kilometres, and resale market
The business	Trading history, bank statements, BAS or financials for larger amounts
Credit	Business and director files; past issues considered case by case
Existing security	Current PPSR registrations, GSAs and any finance on the asset
Purpose	What the funds will do, particularly for refinances and equity release
Exit for a balloon	How a residual will be paid or refinanced at the end

Example: unlocking an owned fleet

A Perth refrigerated transport business owns three prime movers and two reefer trailers outright, worth roughly $520,000 in total. It needs $250,000 for a new depot fit-out and to clear a backlog of supplier invoices.

The bank holds a GSA but has no appetite for more lending. A non-bank asset financier values the fleet, the bank agrees to release the three prime movers once part of the bank’s overdraft is reduced, and the financier advances $260,000 against the prime movers over four years. The business keeps operating the same trucks, now with a monthly repayment it has budgeted for and the depot moving ahead.

The numbers here are illustrative. The pattern is common: owned assets plus a clear purpose often open doors that unsecured lending won’t.

Pros and cons

Pros

• Security comes from the asset, so property often isn’t needed
• Works for purchases, refinances and equity release
• Terms can match the asset’s working life
• Facility limits make repeat purchases fast

Cons

• The asset can be repossessed on default
• Older and specialised assets attract smaller advances
• Existing GSAs can slow refinances
• Balloons need a plan for the end of the term

Model repayments with our equipment finance calculator, and if you’re buying a ute or van, our guide on funding vehicles compares the options.

Turn your assets into options

Whether you’re adding to the fleet or wondering if what you already own could carry a loan, the answer usually starts with a short conversation.

You can enquire with us in about a minute, and doing so won’t register as a credit check. Your information isn’t passed down a chain of funders. A member of our team studies it personally and calls you to go through the detail. List your assets, what’s owed on each and what the money is for with care, so the first suggestion we make is one that works.

See what your assets could unlock →