The Tradie's Complete Guide to Equipment Finance in Australia

Equipment finance (also called asset finance) is funding tied to a specific physical item that earns you money — a ute, trailer, tipper, excavator, welder, generator, compressor, or a full set of trade tools. The item itself usually secures the loan, which is what separates it from an unsecured business loan.

For tradies, this is the workhorse category. Whether you are a sparky replacing a van, a chippy buying a second-hand ute, or a landscaper adding a mini excavator, equipment finance is designed to spread the cost of income-producing gear over its useful life rather than draining your cash in one hit.

A chattel mortgage is the most common structure for tradies operating under an ABN. You own the asset from day one, and the lender takes security over it until the loan is repaid. Because the asset is owned by the business immediately, it can open up GST and depreciation treatment.

Whether you can claim the GST credit on the purchase, and how you depreciate the asset, depends on your business structure and how the item is used. There are also generic small business asset write-off provisions that change over time — the exact thresholds shift, so confirm current eligibility with your accountant rather than relying on last year's figures.

Plenty of tradies finance used equipment — a well-priced second-hand excavator or ute can be a smart buy. Lenders assess used assets on age and condition, so very old gear may attract different terms. Have the dealer or seller invoice ready when you enquire.

A balloon payment (a lump sum at the end of the term) lowers your regular repayments but leaves an amount owing at the finish. It can suit a tradie who plans to upgrade or refinance at term's end, but only if you have a plan for that final figure. A broker can model repayments with and without a balloon so you see the real difference.

Newly registered sole traders and contractors often worry they cannot get equipment finance in the first year or two. Options can be tighter, but specialist lenders exist that assess new tradies differently to a traditional bank — some using low-doc arrangements where the asset provides strong security.

This is exactly where matching to the right lender matters more than which bank you already use for everyday banking. A generalist bank may decline you on time-in-business alone, while a specialist asset lender approves the same deal comfortably.

When a key piece of equipment fails mid-job, downtime costs money fast. Straightforward equipment finance applications with clean documentation can move quickly, particularly for common asset types. Keep your ABN, recent bank statements, and identification ready so nothing holds up the approval.

Registration, insurance, and — for vehicles — CTP and stamp duty are separate costs to budget for on top of the finance. Factor these in so the repayment is not the only number you plan around.

Asset Connect Australia does not provide or arrange finance. We can connect you, through a single vehicle or equipment finance enquiry, with an independent broker from our national network. That professional may discuss provider options and structures, subject to their assessment and provider criteria.