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Australian Equipment Finance Categories 2026

Six categories of Australian equipment finance, with the borrower profile each suits and the trade-offs to watch. For current rates, see each lender\'s own rate card via the lender directory.

What this page does and does not do
  • Categorises Australian equipment finance by structure and use case.
  • Surfaces the trade-offs between chattel, HP, finance lease, operating lease and specialist segments.
  • Does NOT publish current rates: those sit with each lender on their own rate card.
  • Cross-links to the lender directory and the broker-quote application.

The categories below cover the structural shape of the Australian equipment finance market. Inclusion is editorial reference; the right structure depends on tax position, replacement cycle, security profile and the EOFY timing of the deduction.

Chattel mortgage

Chattel mortgage

The default SME equipment finance product. You take legal and tax ownership on day one, claim full GST up front, and claim depreciation or the instant asset write-off at tax time. Lender registers a security on the PPSR.

Best for

  • Owner-operated SMEs buying production equipment
  • Vehicles where the chattel-mortgage tax treatment fits the structure
  • Businesses eligible for the $20,000 instant asset write-off

Watch out for

  • Sub-2-year businesses pay a credit-overlay premium
  • Some lenders add roll-over fees on early payout
  • Director personal guarantees standard
Chattel mortgage explained →
Hire purchase

Hire purchase

Tax-equivalent to chattel mortgage but the lender retains legal title until final payment. Now mostly used for specific asset classes or higher-risk borrowers where the stronger title position helps approval.

Best for

  • Heavy commercial vehicles where the lender prefers HP product
  • Newer businesses where stronger title position eases approval
  • Existing relationship lenders who run HP rather than chattel

Watch out for

  • Largely replaced by chattel mortgage for typical SMEs
  • End-of-term title transfer mechanics vary
  • Same tax outcome as chattel; usually no advantage
Hire purchase explained →
Finance lease

Finance lease

Lessor owns the asset; you have use and pay deductible lease payments. End of term: take ownership, extend, or hand back. Suits operators who want lease accounting treatment without operating-lease end-of-term flexibility.

Best for

  • Businesses preferring lease accounting over ownership
  • Operators with stable use case for the asset full term
  • Specific tax structures where lease deduction profile fits

Watch out for

  • Cannot claim depreciation or the instant asset write-off
  • AASB 16 brings most leases on balance sheet anyway
  • End-of-term residual structure varies by lessor
Equipment finance vs leasing →
Operating lease

Operating lease

Full lease arrangement with the lessor taking residual risk. End-of-term options: return, extend, or upgrade. Best for assets that will be replaced before end of useful life, especially IT and certain hospitality and medical equipment.

Best for

  • IT equipment with predictable 3-4 year replacement cycle
  • Some medical equipment subject to rapid technology change
  • Vehicles in fleet operations where bundled servicing helps

Watch out for

  • No path to ownership without paying market value at end
  • Residual is set by lessor; not always favourable
  • Operating lease over 12 months still on balance sheet under AASB 16
Equipment finance guide →
By industry

Industry-specialist equipment finance

Specialist lenders focus on particular industries (transport, mining, agriculture, medical, hospitality). They typically have better policy fit, faster approval on common asset classes, and sharper pricing than generalist lenders for the same file in their niche.

Best for

  • Transport: heavy commercial vehicles, prime movers, trailers
  • Construction: excavators, loaders, cranes, tipper trucks
  • Medical: imaging equipment, dental fitouts, specialty machines
  • Hospitality: kitchen fitouts, refrigeration, POS systems

Watch out for

  • Specialist lenders may not refinance generalist-funded assets
  • Industry-specific contract terms differ from mainstream
  • Some specialists wholesale-fund through one major bank only
Equipment finance hub →
EOFY-aligned

EOFY-aligned equipment finance

Some lenders offer fast-track approval and settlement workflows around 30 June to ensure assets are installed and ready for use within the financial year. Worth choosing where the instant asset write-off is the key driver.

Best for

  • Assets under $20,000 needing to be installed by 30 June
  • SMEs maximising EOFY tax-deduction timing
  • Operators with EOFY cash position aligned to the deduction

Watch out for

  • Settlement timing depends on supplier delivery, not just lender approval
  • Late-June applications increasingly rejected as deadline approaches
  • Asset must be installed and ready for use, not just ordered
Instant asset write-off guide →

WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.

Equipment finance categories FAQs

Common questions about the framework on this page.

Which equipment finance product is best for an Australian SME?
For most owner-operated SMEs buying production equipment they want to own at end of useful life, chattel mortgage is the default. For technology with shorter replacement cycles (most IT), operating lease usually wins. Finance lease and hire purchase fit specific use cases. The category framework below describes which kind of business each suits.
Why does this page not show rates?
Live rates change with cash-rate moves and lender re-pricing. The most accurate, current number for any product sits with each lender. We link out via the lender directory so the reader sees the live number from the source.
Does the instant asset write-off interact with equipment finance product choice?
Yes, materially. Chattel mortgage and hire purchase put you in the position of legal and tax owner, which means you can claim the $20,000 instant asset write-off (where eligible). Finance lease and operating lease keep ownership with the lessor, so the write-off does not apply. For SMEs trying to maximise EOFY tax positioning around the threshold, the structure choice matters.
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