Quick answer
Most Australian businesses fund machinery with equipment finance, usually a chattel mortgage, where the machine itself is the security and the term roughly matches its working life. Lenders care most about how easily the machine could be resold, how long you've traded and whether cash flow covers repayments. Used, imported or bolted-in machinery can need a larger deposit, a PPSR check or property security instead.
Key points
- The machine usually secures its own loan, so its resale market matters as much as your credit history
- Mobile, widely traded machinery is easier to fund than custom or bolted-in plant
- Imported machines often need deposits paid months before delivery, which equipment lenders rarely cover
- Freight, installation, tooling and training belong in the budget even if the lender won't fund them all
- Search the PPSR by serial number before buying second-hand so you don't inherit someone else's loan
A new machine is usually bought to solve a capacity problem: orders are being turned away, an old unit keeps breaking down, or a job that used to be outsourced could be done in-house for less. The finance question sits underneath that. Which kind of loan suits a machine that will earn its keep over five or ten years, and how do you avoid draining the working capital the rest of the business runs on?
The short version: let the machine pay for itself over its working life, and keep your cash for everything a lender won’t touch.
What makes machinery different from other equipment?
On paper, a CNC router, a wheel loader and a commercial packaging line are all “equipment”. To a financier they’re very different risks, because the machine is normally the main security. If repayments stop, the lender’s fallback is to repossess and sell it. So the question running through every credit assessment is simple: who else would buy this, and for how much?
That’s why lenders sort machinery roughly like this:
- Easy to fund: mobile, branded machines with a deep second-hand market. Think excavators, skid steers, forklifts, tractors and everyday workshop gear.
- Fundable with more questions: production machinery that needs specialist removal, older units, or machines from less familiar manufacturers.
- Hard to fund on the asset alone: custom-built lines, machines built into the premises, and plant whose value collapses once it’s removed from your factory.
If your machine sits in the last group, the lender may still say yes, but it will lean harder on your financials, ask for a deposit, or want other security such as property. Knowing which group you’re in before you apply saves a lot of back-and-forth.
Which finance options suit a machinery purchase?
| Option | How it works | Best for | Watch for |
|---|---|---|---|
| Chattel mortgage | Title sits with your business while the lender holds a registered interest over the machine | Owners keeping the machine long term | Balloon payments that leave a lump sum later |
| Finance lease | The financier holds title and leases the machine to you, leaving a residual owed at the finish | Businesses that prefer lease payments for tax or budgeting | Ownership only passes once that residual is settled |
| Hire purchase | You pay instalments and ownership passes at the end | Some structures and accounting preferences | Less common now; compare carefully |
| Operating lease | You rent the machine for part of its life and hand it back | Technology-heavy machines you’ll upgrade | Usually costs more if you’d have kept it anyway |
| Secured business loan | Borrow against property and buy outright | Custom or bolted-in plant, or a bundle of costs | Your property is on the line |
| Business line of credit | Revolving limit drawn as needed | Deposits, freight and installation | Not built for the main purchase price |
Banks offer most of these and are often the cheapest choice for an established business buying a mainstream machine, so it’s worth asking yours first. Non-bank equipment financiers tend to move faster, take on older or more specialised machines, and work with businesses the bank has passed on.
What do machinery lenders check?
Expect questions in four areas:
- The machine. Make, model, age, hours, condition, supplier and price. For used machinery, a valuation or inspection may be required.
- The business. How long you’ve traded, ABN and GST status, several months of bank statements, plus full financials once the amount gets larger.
- Serviceability. Whether existing cash flow covers the new repayments alongside current debts. A signed contract or order book that explains why you need the capacity helps.
- Your history. Credit files of the business and directors, and how you’ve handled past equipment finance.
Larger or riskier deals often add a personal guarantee from directors. If the machine will sit in leased premises, the lender may also ask for a landlord waiver so it can recover the machine if needed.
Need help working out which lender fits your machine? Send us the machine details and someone who knows equipment lending will review them. Asking costs nothing and leaves your credit file alone.
The deposit gap on imported machines
Here’s a problem many owners only meet once they’re committed. Overseas manufacturers commonly ask for a deposit with the order and a further payment before shipping, while delivery may be months away. Equipment financiers, as a rule, release funds after the machine is on Australian soil and at your door, and some wait until it is commissioned. Until then, the money comes from you.
Ways owners bridge that gap:
- Using cash reserves for the deposit, then having the financier settle the balance on delivery (some will refund part of your deposit into the loan)
- Drawing on a revolving facility to carry the deposit through the shipping months
- Trade finance or import finance, which is built to pay overseas suppliers before goods land
- Property-secured funding when the sums are large and timing is tight
Also budget for freight, insurance in transit, customs clearance, GST at the border and any duty. Ask your lender early which of these it will include in the amount financed.
Buying second-hand: the checks that protect you
A used machine can be excellent value, but a private sale carries a risk new machines don’t. Where a previous owner financed it and hasn’t cleared the debt, that financier may hold a registered security interest, and that interest can follow the machine to you. Running the serial number through the PPSR on settlement day reveals whether any financier still has a claim registered. Your own lender will usually run one too, but don’t rely on that alone if you’re paying a deposit first.
Beyond the PPSR:
- Ask for service records and hours, and have an independent technician inspect high-value units
- Check the machine meets current safety requirements in your state, because retrofitting guards or controls adds cost
- Confirm what spare parts and support are still available for that model
Our guide to finance for used equipment covers how lenders value older machines in more detail.
How much should you borrow?
Start with the full landed and installed cost, not the sticker price:
- Machine price (excluding GST if you’ll claim it back)
- Freight, crane hire and rigging
- Electrical or foundation work and installation
- Tooling, dies, software licences and first consumables
- Operator training and any downtime while you switch over
Then decide what to fund from cash. Many owners finance the machine itself and pay for installation and tooling from cash flow, because lenders are more comfortable funding the asset than the services around it.
Check repayments against what the machine will actually earn or save. Our equipment finance calculator shows repayments with or without a balloon, and the break-even calculator helps you test how much extra work the machine must bring in to cover itself.
A tax note: the $20,000 instant asset write-off, which the ATO now treats as a standing rule, is tested asset by asset. A $168k press brake sails well past it, so expect it to be depreciated over time instead. Your accountant can explain how the finance structure affects deductions and when the GST credit on the price lands in your BAS.
Worked example: a fabrication shop adds a press brake
An illustration only. A sheet-metal fabricator in Melbourne’s south-east has traded for eight years and keeps outsourcing bending work to a competitor. The owners locate a CNC press brake, three years old, at a used-machinery dealer.
| Cost | Amount |
|---|---|
| Press brake (ex GST) | $168k |
| Freight, crane and rigging | $7k |
| Electrical upgrade and installation | $11k |
| Tooling set and software | $14k |
| Total | $200k |
The dealer runs the PPSR search and confirms the machine is clear. An equipment financier approves a chattel mortgage of $168k over five years with no balloon, secured on the press brake. The owners pay the $32k of freight, electrical, tooling and software from cash, keeping their overdraft untouched for wages and materials.
The deciding factor for the lender was simple: the outsourced bending had been costing more each month than the new repayment, and the bank statements showed it.
Ready to put the machine to work?
A machinery purchase goes smoothly when the lender understands the machine, the price and the work it will do. Owners bring us exactly this kind of purchase, including those buying used or imported machines, and those whose bank wanted more than they could offer.
Sending the form is roughly sixty seconds of typing, and your credit score won’t move because of it. We keep your enquiry in-house instead of hawking it around the market, so there’s no flood of calls from strangers. One of our team studies the machine and your numbers, then phones you. Please list the true make, year and price, plus honest turnover figures; accurate inputs are how a sensible match turns up on the first go.
Frequently asked questions
Can I get finance for used machinery?
Yes. Many equipment financiers fund second-hand machinery bought from dealers, auctions or private sellers. Expect closer scrutiny of age, condition and value, possibly an independent valuation, and sometimes a shorter term or larger deposit than for a new machine.
What's the best type of finance for machinery?
For most owners who want to own the machine, a chattel mortgage is the default because the business owns the asset from day one and the machine is the security. Finance leases and hire purchase suit some tax and accounting set-ups, and operating leases suit machines you'll replace regularly. Your accountant can say which suits your structure.
Do I need a deposit for machinery finance?
Not always. Established businesses buying mainstream machinery can often finance the full price. A deposit is more likely when the business is young, the machine is specialised or old, or your credit file has issues.
Can the instant asset write-off apply to machinery?
Only to assets costing less than $20,000 each, for businesses with aggregated turnover under $10 million. The ATO says that threshold is ongoing from 1 July 2026. Most production machinery costs more, so it is depreciated instead, often through the small business pool.
Will a lender fund a machine I'm importing from overseas?
Many will once the machine lands and is delivered, but few will pay the manufacturer's upfront deposit or progress payments before shipping. Plan to fund that early money another way, such as cash, a line of credit or trade finance.
How long can a machinery loan run?
Terms commonly range from two to seven years, and lenders try to keep the term inside the machine's useful life. A balloon payment at the end can lower repayments but leaves a lump sum to fund later.