Farm machinery finance

What is farm machinery finance?

It is equipment finance applied to agricultural plant: tractors, headers and fronts, air seeders and planters, self-propelled sprayers, balers, feed mixers, centre pivots and pumps, grain handling, livestock handling systems and farm vehicles. The machine is the security, which is why most purchases need no deposit and no property. The three structures are the same as any equipment finance: a chattel mortgage (you own the machine and the lender holds a mortgage over it), a hire purchase (the lender owns it until the last payment), and a lease (the lender owns it and rents it to you, with a residual or a hand-back at the end).

What is specific to farming is the repayment shape. Cropping income arrives after harvest, livestock income at sales, and horticulture on a picking calendar. Lenders with agribusiness desks publish repayment structures built around that, and the dealer financiers owned by the manufacturers do the same.

Who finances farm machinery, and what do they publish?

Three groups. The major banks through their equipment finance and agribusiness arms. The manufacturer-owned financiers, which finance only their own brand and are arranged at the dealership. And the agri-specialist and non-bank lenders, which a broker reaches. Checked against each lender's published page on 20 September 2026; "Not published" means the page does not state it. Terms change without notice, so confirm before relying on them.

How do seasonal repayments work?

Instead of twelve equal monthly payments, the schedule is weighted to when the money arrives. A broadacre cropper might pay most of the year's instalments between December and March and a token amount in the growing season. A livestock producer might pay in the months of the regular sales. Some lenders structure it as one or two annual payments; CommBank publishes quarterly-in-advance as an option. The total interest over the term is slightly higher than a level monthly schedule, because the balance reduces more slowly in the low months, and the trade is worth it when the alternative is drawing on an overdraft to make a payment in a month with no income.

Two practical points. First, ask for the structure at the quote stage; a lender that publishes seasonal options still needs to see the cash-flow pattern to set it, and changing a schedule after settlement is a contract variation. Second, if the machine will be paid out early, check the early repayment fee: ANZ publishes that one may apply, and Grow Finance's balloon of up to 40% on a three-year term is a different way of keeping the repayments low.

Chattel mortgage, hire purchase or lease for a tractor?

For a machine you will keep for its working life, the chattel mortgage is the usual answer: you own it from day one, claim the full GST in your next BAS if you are registered on a cash basis, and claim depreciation and interest. A hire purchase gets the same tax result by a different route and suits businesses that account on an accruals basis. A finance lease puts the machine on the lender's balance sheet with rentals that are deductible, and Westpac publishes that you return the asset when the lease ends. An operating lease, which DLL publishes for farm equipment, is for plant you intend to hand back and replace, such as a header turned over every few seasons under a fixed-cost arrangement.

The tax benefits guide works through the depreciation and GST treatment of each, and the chattel mortgage guide covers the balloon decision.

Dealer finance or a broker?

Manufacturer financiers exist to move their own machines. John Deere Financial finances John Deere equipment only; Kubota Australia Finance publishes business offers at promotional rates from 0% to 2.90% p.a. on specific series. Those rates are real, and on a new machine on the promotion they can be the cheapest money available. They are usually tied to a particular model, a shorter term or a deposit, and they do not help with a used machine from a private sale, a second brand on the same property or a mixed purchase of plant and vehicles.

A broker quotes across the banks and the agri specialists on any brand, new or used, from one conversation, and is paid by the lender on settlement. Your Finance Guide does not lend or assess applications; we refer you to one licensed broker partner whose practice fits the purchase. The sensible move is to take the dealer's written offer to the broker and let them show you whether a bank or specialist beats it on total cost, including the balloon and any fees.

What does a broker need to quote a machine?

For a bank: the dealer quote or private-sale details for the machine (make, model, year, hours, price); the last two years of financial statements and tax returns; the current year's BAS; an ATO portal print showing tax is up to date; a summary of existing equipment finance and any overdraft; and details of the trading entity and the directors or partners. For a non-bank low-doc product on a smaller amount: ABN and GST registration, photo ID and six months of bank statements, per Grow Finance's published floor. For a used machine, a valuation or inspection may be requested; for a private sale, proof of ownership and a PPSR check are standard.