Loan basics
Asset Finance: Compare Lenders | Business Loan Store
Learn how asset finance works for Australian businesses, what it can cover and what lenders look at, then compare equipment finance lenders.
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- 8 min read
Key takeaways
- Asset finance helps a business spread the cost of equipment, vehicles or other assets instead of paying for them all at once.
- The main structures are chattel mortgages, finance leases, commercial hire purchase and operating leases, and each one handles ownership differently.
- Tax and GST treatment can differ between structures, so ATO guidance and an accountant are useful reference points.
- Each lender sets its own criteria, and any outcome depends on the lender's assessment.
- Business Loan Store lists equipment finance from verified lenders in alphabetical order by default and is not a lender.
Asset finance is a way for a business to pay for equipment, vehicles or other income-producing assets over time, where the asset itself is usually central to the arrangement. Instead of paying the full price upfront, the business makes repayments over the contract, and the structure chosen decides who holds ownership along the way. Business Loan Store compares equipment finance from verified lenders and is not a lender itself.
What is asset finance and how does it work?
Asset finance is funding a business uses to buy assets such as equipment or vehicles, and in many structures the asset also serves as security for the finance. In Australia the term is often used interchangeably with equipment finance. Business Loan Store compares equipment finance alongside business loans, cashflow finance, invoice finance and commercial property loans. Moneysmart and business.gov.au both publish neutral, general guidance on borrowing for a business.
The process usually follows these stages:
- Choose the asset. The business decides what equipment or vehicle it needs, often getting a quote or invoice from the supplier.
- Compare lenders and structures. Options differ in ownership, repayments and lender criteria.
- Apply and provide documents. The lender asks for information about the business and the asset.
- The lender’s assessment. The lender reviews the application against its own criteria.
- Contract and supply. If the lender makes an offer and the business accepts, the lender usually pays the supplier and repayments begin under the agreed structure.
If your business is weighing up an equipment or vehicle purchase, you can see if you qualify with lenders that offer asset finance.
What assets can businesses finance?
Businesses often look to finance assets they use to earn income. The examples below are general illustrations, not a list of what any particular lender accepts:
- Vehicles: utes, vans, trucks and cars used in the business
- Machinery: earthmoving, manufacturing or agricultural equipment
- Tools and trade equipment: the gear tradespeople and workshops rely on
- Technology: computers, servers and point-of-sale systems
- Fit-out: shop, office or clinic fit-outs
Whether a lender accepts new or used assets, and which asset types it will consider, depends on that lender’s current policy. Loan amounts, terms and asset age limits also vary from lender to lender. Business Loan Store only takes third-party lender details from each lender’s own published material, so that material is the place to confirm them.
What are the common asset finance structures?
The main structures are chattel mortgage, finance lease, commercial hire purchase and operating lease. The key difference between them is who owns the asset during the contract and after it ends.
- Chattel mortgage: the business generally owns the asset from the start, and the lender holds a mortgage over it as security until the loan is repaid.
- Finance lease: the lender owns the asset and leases it to the business. At the end there is typically an option to pay a residual, refinance or hand the asset back.
- Commercial hire purchase: the lender owns the asset while the business makes payments, and ownership usually passes to the business once the final payment is made.
- Operating lease: the business uses the asset for a set period and usually returns it at the end, while the lender keeps ownership.
Tax and GST treatment can differ between these structures, including how deductions and GST credits are handled. The ATO publishes general guidance for businesses, and an accountant or registered tax agent can explain how each option applies to a specific business. This is general information to discuss with a qualified adviser. It is not a recommendation of any structure.
Is asset finance different from a general business loan?
Yes. Asset finance is linked to a specific asset, while a general business loan can usually be used for a wider range of business purposes.
| Asset finance | General business loan | |
|---|---|---|
| What the money is for | A specific asset, such as equipment or a vehicle | Broader business purposes, depending on the loan terms |
| Role of the asset | Usually central to the arrangement, often as security | May or may not be linked to an asset, depending on the lender |
| Compared on Business Loan Store | Yes, under equipment finance | Yes |
Which option suits depends on the business’s circumstances and each lender’s criteria. Neither is right for every business. Because Business Loan Store compares both categories from verified lenders, the two can be looked at side by side before any application is made.
Who can asset finance suit, and when is it not the answer?
Asset finance can suit a business that needs a particular asset to keep trading or to grow, and that prefers to spread the cost rather than use up its cash reserves.
It can be a reasonable fit when:
- the business needs a vehicle, machine or piece of equipment it will use regularly
- keeping cash on hand for day-to-day running costs matters more than owning the asset outright from day one
It may not be the answer when:
- the need is for wages, stock or general working capital rather than an asset, because cashflow finance and general business loans are designed for broader use
- the pressure comes from a tax debt, because the ATO offers payment plans that may be enough on their own
- the business can buy the asset outright without straining its day-to-day finances
- the asset is only needed briefly, in which case hiring or renting may be simpler
These are general scenarios, not advice for any particular business.
What do lenders consider in their assessment?
Lenders generally look at the business, its finances, the asset and the credit history of the people behind it. Each lender sets its own criteria.
Common areas include:
- Trading history: how established the business is
- Financial position: revenue, profit, existing debts and cash flow
- The asset: its type, condition, value and expected useful life
- Credit history: for the business and its directors or owners
Lenders may ask for identification, business registration details, financial statements, bank statements and a supplier quote. The exact list depends on the lender’s current policy. Business Loan Store is not a lender, so the decision always rests with the lender’s assessment.
How does Business Loan Store help you compare asset finance?
Business Loan Store is an Australian business-finance marketplace. It offers comparison, lender discovery and a Help Centre, and it does not lend money.
- Neutral ordering: results are listed alphabetically by lender by default, and no lender pays to appear or to be placed higher.
- Lender-sourced details: third-party lender information comes only from each lender’s own published material.
- Matching: a business can share its details and be matched with lenders based on what it provides.
- Contact: enquiries go through the website form, Monday to Friday, 9am to 5pm AEST.
- Ownership: the site is owned by U Collective Group Pty Ltd, ABN 18 694 322 159.
Ready to look at asset finance options?
If an asset purchase is coming up, the next step is to start your application and tell us about your business and the asset you have in mind. It helps to have your ABN, recent bank or financial statements and a supplier quote ready, and the form takes a few minutes to start. Eligibility depends on each lender’s assessment.
No obligation. Eligibility is subject to assessment.
This is general information only and does not take into account your objectives, financial situation or needs. All applications are subject to lending criteria, assessment and approval.
Questions about this topic
Is asset finance the same as equipment finance?
In everyday use, the two terms usually mean the same thing: funding to buy a business asset such as machinery, technology or a vehicle. Some lenders use "asset finance" as the broader label and "equipment finance" for particular products, so the exact meaning depends on each lender's own material. Business Loan Store groups these options under equipment finance in its comparison.
Can asset finance be used for a used vehicle or second-hand equipment?
Whether a used vehicle or second-hand equipment can be financed depends on each lender's current policy, and each lender publishes its own criteria. A lender may look at the asset's age, condition and value as part of its assessment. Business Loan Store shows third-party lender details taken only from that lender's own published material, so readers can check a lender's position on used assets before applying.
How does asset finance affect tax and GST for my business?
Tax and GST outcomes depend on the structure chosen and the business's own circumstances. A chattel mortgage, finance lease, commercial hire purchase and operating lease can each be treated differently for deductions and GST credits. The ATO publishes general guidance for businesses, and an accountant or registered tax agent can explain how the rules apply to a particular situation. This page does not provide tax advice.
Is Business Loan Store a lender?
No. Business Loan Store is an Australian business-finance marketplace offering comparison, lender discovery and a Help Centre, and it does not lend money itself. It is owned by U Collective Group Pty Ltd, ABN 18 694 322 159. Any finance offer comes from the lender and depends on that lender's assessment. Enquiries go through the website form, Monday to Friday, 9am to 5pm AEST.
Do lenders pay to rank higher on Business Loan Store?
No lender pays to appear on Business Loan Store or to be placed higher in results. By default, lenders are listed alphabetically, which keeps the order neutral. Lender details on the site come only from each lender's own published material, so product information reflects what the lender itself states. Readers can then confirm a lender's current terms directly with that lender. This is general information only and does not take into account your objectives, financial situation or needs. All applications are subject to lending criteria, assessment and approval.