Equipment and machinery finance for Australian businesses

Equipment finance is funding used by a business to purchase vehicles, machinery, plant and other income-producing assets. Common structures include a chattel mortgage and finance lease. The right structure depends on the asset, your business and what you are trying to achieve.

A chattel mortgage is a common way for a business to finance vehicles, machinery and equipment. Your business generally purchases and owns the asset, while the lender takes security over it for the term of the loan. Speak with your accountant about the tax, GST and accounting treatment for your circumstances.

A finance lease allows a business to use an asset while the financier owns it during the lease term. The business makes agreed lease payments and the agreement sets out what happens at the end of the term.

The main difference is ownership. With a chattel mortgage, the business generally purchases and owns the asset and the lender takes security over it. With a finance lease, the financier owns the asset during the lease term. Tax, GST and accounting treatment can also differ, so the structure should be discussed with your accountant.

A balloon or residual is an amount left owing at the end of the finance term. Deferring part of the principal generally reduces the scheduled repayments during the term, but leaves a larger final amount to deal with.

Possibly. A balloon can help preserve cashflow, but it should not be selected only because it produces a lower repayment. Consider how long you expect to keep the asset, its likely end value, expected utilisation, the finance term, total amount payable and how the final amount will be paid.

The balloon becomes payable at the end of the finance term. Depending on your position and lender requirements at that time, you may pay it from business funds, use proceeds from selling or trading the asset, or apply to refinance it. Refinancing is not automatic.

No. A useful comparison also considers fees, deposit, term, balloon or residual, scheduled repayment, security requirements, early payout costs, total amount payable and whether the lender fits the transaction.

Requirements vary. You may be asked for identification, ABN and business details, the purpose of the finance, supplier quotes or invoices, existing commitments, bank statements, BAS, financial statements, tax returns and details of contracts or work in progress.

Not always. Some applications may qualify for a streamlined assessment. Larger or more complex applications may require financial statements, BAS, tax returns, bank statements or other supporting information.

Low doc generally refers to an application assessed with less traditional financial information than a full financial assessment. It does not mean no assessment. Lenders can still consider ABN history, GST registration, credit profile, business experience, the funding purpose and other information.

There is no single approval timeframe. A straightforward application with complete information may move more quickly, while a larger or more complex transaction can require further information, valuations or lender questions.

Potentially. A new ABN does not automatically rule out finance. Lenders may look more closely at previous industry experience, available contribution, credit history, the funding purpose and the work available to the new business.

Potentially. A lender will generally want to understand what happened, when it occurred, whether it has been resolved and what the business looks like today. We prefer to understand known issues before selecting a lender and lodging an application. Talk to the Dexter team about your circumstances.

Not necessarily. Multiple applications can create unnecessary credit enquiries without improving the underlying proposal. We prefer to understand the application first and approach a lender suited to the transaction.

Debtor finance is a working-capital facility linked to eligible unpaid business invoices. It can provide earlier access to part of the value tied up in eligible receivables rather than waiting for customers to pay under their normal trading terms.

An overdraft is generally an agreed credit limit attached to a business banking facility. Debtor finance is linked to eligible invoices or receivables, so available funding may change as the debtor ledger changes.

Yes. Dexter can consider business and cashflow finance, debtor finance and commercial asset finance. The right option depends on why the funds are needed and how the business generates and collects revenue.

Potentially. Refinancing may replace an existing facility, restructure repayments or, where policy and available equity permit, release business capital. The asset value, payout, remaining term, existing facility and purpose of the refinance all need to be considered.

A broker can consider different lenders and structures rather than relying on one lender’s credit policy. Dexter reviews what you need to fund, your business position and how the application should be presented, then helps manage the process through to settlement.

Discussing a transaction with Dexter is not the same as lodging a credit application. If a formal application and credit enquiry are proposed, we can explain the process before proceeding.

While there are no guarantees, we can often help clients explore a practical way forward, including more complex scenarios. Every application remains subject to lender assessment, eligibility, policy, terms and conditions. Give the Dexter team a call or send an enquiry to discuss your options.

Tell us what you want to fund, a little about your business and what you are trying to achieve. We can then explain what information is required and the next step. Contact Dexter Finance to get started.