Forestry business loans: funding machines, haulage fleets and the gaps between harvest contracts

A single harvester with a processing head can be worth more than a forestry contractor earns in a year. Add a forwarder, a couple of log trucks with trailers, a service ute and a float to move the gear between coupes, and a modest crew can be running several million dollars of plant. That is the first thing to understand about forestry finance: it is mostly machine finance, and the machines are unusually expensive, unusually specialised and only as valuable as the work lined up for them.

This page covers how lenders read forestry businesses, which loan types fit which needs, and how to put a proposal together that a credit team will take seriously.

Who borrows in forestry, and for what?

“Forestry” covers several quite different businesses. Lenders treat each one differently.

Business	Typical borrowing need	Finance that usually fits
Harvest contractor	Harvesters, forwarders, feller bunchers, processing heads, replacement engines	Equipment finance or a chattel mortgage
Haulage contractor	Log trucks, jinkers and trailers, cranes	Truck finance
Silviculture and planting crew	Utes, planting gear, spray units, staff costs in planting season	Business car loans, small unsecured loans
Plantation landholder	Land purchase, roads, fencing, establishment costs before the first thinning	Rural property loans, secured business loans
Sawmill or processor	Kilns, saws, yard equipment, log stock	Equipment finance plus working capital loans

Most enquiries we see from the sector come from contractors, so the rest of this page leans that way.

Why is the contract worth more than the machine?

To a lender, a used harvesting head is a hard asset to sell. There are only so many buyers in Australia, they are often in the same regions as you, and if your business has failed there is a fair chance the reason (a contract lost, a mill closed) has hit them too. Compare that with a prime mover, which can be resold to almost any transport business in the country.

So credit teams look past the machine to the income stream behind it. Expect questions like these:

• How long does your contract with the forest manager have to run? Lenders like the finance term to sit inside it. Five-year finance on a two-year contract is a hard sell.
• How much of your revenue comes from one client? Many contractors work for a single plantation company. That is normal, but lenders want to see it acknowledged and, ideally, a history of renewals.
• How are you paid? Rates per tonne harvested or hauled, monthly payment runs and any rise-and-fall clauses for fuel all affect how predictable your bank statements look.
• What happens if the contract ends? A sensible answer might be that the trucks can switch to general haulage, or that another grower in the region uses the same system.

Bring a copy of the contract, or at least a letter from the forest manager confirming tenure and volumes. It turns a vague risk into a known one.

How do wet winters and fire days affect borrowing?

Forestry income is lumpy in ways that don’t match a monthly repayment schedule. Machines stand idle when soils are too wet to work without damaging the site or the roads, and forest managers commonly pull crews off on high fire danger days in summer. Mill shutdowns over Christmas cut haulage volumes too.

Lenders who know the sector will look at twelve months of bank statements, not three, so the quiet weeks and the busy ones average out. A few practical moves help:

1. Set up a revolving facility before the wet season. A business line of credit sized to cover a few weeks of wages, insurance and repayments is easier to get when your recent deposits are strong.
2. Ask about seasonal repayment structures. Some asset financiers will set lower repayments in your known slow months and higher ones in your peak. Not every lender offers this, so ask early.
3. Avoid stacking short-term debt to cover a stand-down. Several daily-repayment loans taken during a wet spell can do more damage than the stand-down itself.

If a stand-down has already bitten and the bills are landing, tell us what you’re dealing with. One quick form, roughly a minute, and your credit file isn’t touched for asking.

What changed after native forest harvesting ended?

Commercial native timber harvesting in Victoria’s state forests stopped on 1 January 2024, brought forward from 2030, and Western Australia’s native forest logging ended at the same time. Many contractors who worked those coupes either left the industry, moved to plantation work or took up the forest management and fire work the Victorian Government offered.

For lending, that has two effects. First, nearly all harvesting and haulage now depends on the plantation estate, which ABARES put at about 1.71 million hectares in 2023–24, split roughly 1.01 million hectares of softwood and 674,000 hectares of hardwood. Second, the same ABARES figures showed total log harvest falling 6.6% in 2023–24 to about 23.2 million cubic metres, with log value down to about $2.26 billion. Lenders read those numbers too. A contractor with secure plantation volumes is in a very different position from one hoping native-style work comes back.

If you moved from native harvesting into plantation or fire-management work, be ready to explain the change and show how the new income looks in your bank statements.

Which risks do lenders look at most closely?

• Machine hours and age. Harvesters rack up hours quickly. A lender financing a used machine will want its hours and service records, and may shorten the term on older gear.
• Repair shocks. A blown engine or hydraulic failure can cost tens of thousands of dollars and stop a crew. Lenders like to see a maintenance plan and some cash in reserve.
• Fuel and insurance. Both are large, rising costs. Show a recent month’s fuel bill and your insurance renewal dates.
• Fire and weather losses. Equipment lost in a bushfire is a real risk. Lenders will check that machines are insured for replacement value and that their interest is noted on the policy.
• ATO arrears. Fuel tax credits help, but contractors who fall behind on BAS during a poor season are common. Lenders can work with an ATO payment plan if it’s in place and being met.

What documents should a forestry business prepare?

• Your contract or a tenure letter from the forest manager, showing volumes and end date
• A full year of statements from your business account
• Equipment list with makes, models, hours, values and any existing finance
• Quotes or dealer invoices for the machine or truck you’re buying
• Last two years of financials and tax returns, if the amount is large or you’re going to a bank
• An ATO portal statement and recent BAS
• Insurance schedules for the fleet

Example: a haulage contractor adding a third log truck

An illustrative scenario only. A family haulage business in the Green Triangle runs two log trucks on a plantation contract with three years left. The forest manager offers an extra run if the business can add a truck within six weeks. A suitable used truck and trailer costs about $380k.

The bank likes the business but wants updated financials that the accountant can’t finish before the deadline. An asset finance lender works from twelve months of statements, the existing truck finance history and a letter confirming the contract and the extra volume. It approves a chattel mortgage over the new truck on a term that ends inside the contract, with a modest deposit drawn from the business account. Before winter, the owners also arrange a small revolving facility to cover wages during wet-weather stand-downs, so the new repayments never depend on a dry month.

Run your own numbers through the equipment finance calculator before you talk to anyone.

Getting a forestry business funded

Forestry rewards contractors who keep their gear working and their finance lined up with their contracts. When a bank’s timeline or criteria don’t fit, there are lenders who understand plantation work, seasonal stand-downs and specialised machines. You may also find business loans against rural property worth reading if you own land.

The form is short, about sixty seconds between smoko and the next load, and filling it in doesn’t trigger any credit enquiry. Your fleet list and contract details stay with us rather than being shopped to dozens of financiers, so the only callback comes from one of our own specialists, who will have read about your machines, client and stand-down months before picking up the phone. Honest numbers on turnover and the sum required matter more than anything else here: they let us line up a workable option on the first attempt instead of the third.

Tell us about your forestry business →