Equipment Finance in Australia

Yes, most 2nd hand equipment is able to be financed, however, the age and class of the equipment may impact the term and structure of the loan and, in some very rare cases, preclude funding.

Yes, equipment from a private supplier can be financed.

The key point to understand is that a Recognised Supplier of equipment (i.e. a car dealership) guarantees clear title flow when the goods are sold. This is not the case when assets are sold by a ‘private seller.’

In these circumstances, we will liaise directly with the party selling the equipment, seeking proof of ownership to satisfy ‘title flow’ and conducting PPSA searches to ensure no other parties have lodged an interest in the asset.

Where existing finance is in place for the asset, we will obtain pay-out letters to ensure these facilities are paid out at settlement.

Depending on the size of the borrowings, asset inspections and valuations may be required as a further safeguard for our client and the bank.

In general, repayments are structured monthly, in arrears. However, payments can be structured to match the cash flow cycles of any business, particularly those with seasonal fluctuations. For example, agricultural businesses often receive income on an annual basis, so repayments for these clients can be structured to mirror this.

In most cases, we can finance the GST-inclusive price, and you can pay the GST as a lump sum when you receive the benefit via your monthly or quarterly BAS.

Construction finance is possible in certain circumstances. It allows for progress payments during the construction phase (similar to a new home build), which can be converted to an equipment loan once the equipment has been completed and commissioned.

We encourage our clients to engage with us early in the purchasing process to negotiate payment terms with suppliers, ensuring the finance facility can meet the terms of the sale agreement.

Structuring these terms appropriately preserves your cash flow, which is vital given that the equipment is not income-producing until delivered.

Yes, we are able to fund up to 100% of the cost or the total cost of the equipment – it’s entirely up to you and your situation.

Equipment finance loans are flexible and generally range from two to five years with a balloon/residual payment if required.

In rare cases, loans can be extended to seven years and sometimes up to a maximum of ten years, dependent upon the type and class of asset.

Security for equipment is generally standalone against the equipment itself in addition to director guarantees. No other collateral security or GSA is required.

Once we have everything we need, the pre-qualification process for most transactions is completed within one to two business days.

On approval, we will issue the final documentation in-house. Once the equipment is ready for delivery and we have the signed documents in hand, along with meeting all settlement conditions, we can settle with the supplier.

Financing your plant and equipment conserves cash which you can use elsewhere in your business or as an additional working capital buffer.

Yes, we can.

This type of funding is arranged using a Letter of Credit, which allows the goods to be imported, with a conversion to standard equipment finance once the goods arrive in Australia and are commissioned.

It is important to engage with us early so we can assist you in navigating the payment terms agreed upon with the supplier.

Equipment financing terms typically range from one to seven years, depending on the type of equipment and the lender’s policies.

• Short-term financing (1-3 years): often used for equipment that may become obsolete quickly.

• Long-term financing (4-7 years): common for more expensive or durable equipment.

Some lenders may offer longer terms for specific types of equipment or situations.

The instant asset write-off allows eligible businesses to claim an immediate deduction for the cost of an asset in its first year of use.

Initially, the deadline for the instant asset write-off required assets to be purchased by 31 December 2020 and first used or installed by 30 June 2021. However, this deadline has been extended to 30 June 2025.

Ledge is one of the most trusted commercial equipment financing companies in Australia.

As specialist equipment finance brokers, we transact a large volume of business with our lenders, from simple to more complex deals.

We’ve developed strong relationships with most banks and financiers. This gives us access to competitive pricing and T&Cs that clients may not be able to access directly. As a result, we know which lenders to approach for particular transactions and we have the knowledge and experience to present proposals to lenders in a format that is easier for them to assess.

Whether you’re seeking equipment finance in Perth, Sydney, or anywhere else in Australia, Ledge can assist you.

Equipment financing allows businesses to acquire equipment without paying the full price upfront. Here’s a brief overview of how it works:

1. Application: The business applies for financing through a lender or financial institution, providing financial details about the equipment and the financial health of the business.
2. Approval: The lender reviews the application, assessing the business's creditworthiness and the value of the equipment.
3. Terms: Upon approval, the lender offers financing terms, including the loan amount, interest rate, repayment schedule, and any required down payment.
4. Purchase: The lender provides the funds – often directly to the equipment seller – allowing the business to acquire the equipment.
5. Repayment: The business makes regular payments (usually monthly or quarterly) over the term of the loan.
6. Ownership: Depending on the type of financing (loan vs. lease), the business may own the equipment outright after the final payment, or have the option to purchase it.

Equipment loan finance involves borrowing money to buy equipment, with the business owning it once the loan is paid off. Loan payments tend to be higher, and the business can benefit from claiming depreciation on the equipment as a tax deduction.

On the other hand, equipment lease finance involves renting equipment without ownership; the business pays for its use and typically has options at the end of the lease to purchase, return, or extend the lease. Payments are generally lower, and lease payments may be tax-deductible as operating expenses.

The temporary full expensing measure will be extended until 30 June 2023. This extension aims to provide further support for business investment and job creation.

Under this measure, businesses with an aggregated turnover of less than $5 billion can immediately deduct the business portion of eligible new depreciating assets that are first held and used (or installed ready for use) for a taxable purpose between 7.30 pm AEDT on 6 October 2020 and 30 June 2023 (previously 30 June 2022).

All other aspects of the temporary full expensing measure will remain unchanged. This means that businesses with an aggregated turnover of less than $50 million can apply the extended measure to the business portion of eligible second-hand depreciating assets.

When you upgrade your equipment, you can enjoy numerous benefits, such as:

• Tax advantages
• Attraction in the market
• Repair cost vs. repayment costs
• Quality and efficiency of the asset

1. Preserved cash flow: Businesses can acquire necessary equipment without significant upfront costs, freeing up cash for other expenses.
2. Flexible payment options: Financing can offer tailored payment plans to suit your business’s budget and cash flow cycles.
3. Access to the latest technology: Businesses can acquire newer, more efficient equipment to boost productivity and reduce downtime.
4. Tax advantages: Lease payments may be deductible as operating expenses, and loan payments can allow for depreciation deductions.
5. Improved budgeting: Fixed payment schedules can help you plan and manage your budgets more effectively.