Commercial asset finance is business finance used to purchase an identifiable vehicle, machine or piece of equipment.
The equipment generally provides security for the finance.
Businesses can potentially finance assets including:
Both new and used equipment can potentially be financed.
Selected lenders can also finance equipment purchased through:
The lender assesses both the business and the asset before approving the finance.
Potentially, yes.
A newer ABN does not automatically prevent a business from qualifying for commercial equipment finance.
The important point is that lenders do not all use the same approval criteria.
One lender may require a longer business trading history.
Another may be prepared to consider a newer business if the rest of the application is strong.
For a newer ABN, lenders may place additional weight on:
The application needs to explain both why the equipment is required and how the business will support the finance.
There is no single minimum ABN age that applies across every commercial asset finance lender in Australia.
This is one of the most important points for newer businesses to understand.
You should not automatically assume that you must wait:
before discussing equipment finance.
Some lenders prefer established businesses.
Selected lenders can consider businesses with shorter trading histories.
The available pathway depends on the complete application.
Potentially.
A business with less than 12 months under its current ABN may still have equipment finance options.
The lender may look more closely at other parts of the application, including:
For example:
ABN age: 8 months
Industry experience: 11 years
Business: Earthmoving
Equipment: Used excavator
Current work: Ongoing civil projects
Looking only at the eight-month-old ABN would not show the complete position.
The applicant has more than a decade of industry experience and an established source of work.
That background should form part of the finance application.
Yes.
Relevant experience can be particularly important for a newer business.
A lender may consider experience gained as:
For example, someone establishing a new excavation business after operating heavy machinery for ten years already understands:
The ABN may be new.
The operator is not necessarily new to the work.
Explain the complete history.
A business may have operated for years before changing from:
For example:
Previous sole trader: 5 years
Current company ABN: 9 months
Industry: Same
Customers: Same
Equipment use: Same
The current ABN is relatively new, but the underlying business activity may be well established.
Provide that background during the initial assessment.
Straightforward commercial asset finance applications can be approved in as little as 24 hours once the lender has the information required.
Fast approval is generally easier when:
A fast application is not simply about rushing the lender.
It is about preparing the information properly before the formal submission.
Approval can take longer where the lender needs additional information.
This can include:
Many delays can be reduced by identifying these issues before the formal lender application.
The exact finance application documents depend on the lender.
For an initial assessment, you may need:
A lender may later request:
Not every business needs every document.
The aim should be to identify the lender first and then provide the documentation that particular lender requires.
Not with every lender.
Selected lenders can consider commercial equipment finance without requiring two complete years of financial statements.
For an eligible low doc application, the lender may instead use:
The lender still needs to determine whether the business can afford the finance.
Low doc does not mean no assessment.
Not always.
Some lenders require tax returns as part of their standard assessment.
Selected lenders offer alternative documentation pathways.
The requirement can depend on:
If complete tax returns are not available, discuss that at the beginning rather than assuming the business cannot apply.
Not in every application.
BAS may be requested where the lender wants additional evidence of business turnover.
Other lenders may be comfortable assessing eligible applications through bank statements and supporting information.
Recent bank statements can give the lender a current picture of how the business is operating.
They may show:
Where a business does not yet have several years of financial history, current bank statement performance can become particularly important.
Selected lenders can consider startup or early-stage businesses, but the application generally needs additional context.
Useful information may include:
The lender needs to understand what will generate the income required to make the repayments.
Potentially.
A contract is not required for every equipment finance application.
However, if the business is purchasing equipment specifically to complete new work, supporting information can help.
This could include:
For example, if a contractor needs an excavator for a newly awarded project, showing the lender that work can help explain why the equipment is being purchased.
Potentially.
A deposit reduces the amount being financed.
For example:
Equipment purchase: $120,000
Deposit: $20,000
Finance amount: $100,000
A deposit can sometimes:
A deposit is not required in every application.
The amount, if any, depends on the lender and overall application.
Potentially.
Selected applicants may qualify to finance the full purchase price of eligible commercial equipment.
This depends on factors including:
A newer ABN should not assume that a large deposit is automatically required.
Yes, subject to the transaction.
If the business already owns equipment, available equity may potentially contribute toward the new purchase.
For example:
Trade-in value: $70,000
Existing payout: $25,000
Potential equity:
$45,000
That equity may reduce the amount that needs to be financed.
Yes.
Sole traders can apply for commercial asset finance.
The lender may consider:
Complete financial statements are not required by every lender.
Potentially.
A sole trader with a newer ABN may still have options where the complete application supports the purchase.
For example:
ABN age: 5 months
Trade experience: 9 years
Current customers: Existing
Asset: Commercial machinery
Bank activity: Current trading income
The lender may assess the full background rather than simply declining because the ABN is new.
Yes.
Commercial asset finance can be available for used machinery and equipment.
The lender may assess:
Older equipment may result in different:
An inspection or valuation may also be required.
Potentially.
A newer business combined with used equipment can require more careful lender matching because both the applicant and asset need to fit the lender's criteria.
The lender may look at:
The fact that the equipment is used does not automatically prevent approval.
Yes, through selected lenders.
Private-sale equipment finance can require additional checks around:
An inspection or valuation may be required.
Private-sale finance can therefore take slightly longer than a straightforward dealer transaction if the required information has not been prepared.
Yes, through selected lenders.
An initial finance assessment or pre-approval can be particularly useful before an auction.
It may help the business understand:
Final approval still depends on the equipment eventually purchased.
TAFS can arrange eligible commercial equipment finance across several industries.
Selected lenders may consider other identifiable income-producing business equipment depending on the asset and application.
A lender generally looks at the complete application.
The lender may consider:
A longer history provides more information, but shorter trading history does not automatically prevent approval.
Experience becomes more important where the current business is new.
The lender wants to know whether the applicant understands:
The lender needs to understand how the repayment will be made.
Income may be demonstrated through:
The documentation pathway depends on the lender.
This may include:
The lender looks at the proposed equipment repayment alongside everything the business already needs to pay.
The lender may consider:
Selected lenders may still consider some applications involving previous credit issues.
The lender considers:
Ultimately, the lender needs to be satisfied that the proposed repayment fits the business's financial position.
TAFS primarily arranges commercial equipment through a chattel mortgage.
Under a chattel mortgage:
This can be used for eligible new and used commercial assets.
Potentially.
A balloon leaves part of the finance amount outstanding at the end of the term.
For example:
Equipment financed: $100,000
Term: 5 years
Balloon: $20,000
The regular repayment is generally lower because $20,000 remains payable at the end.
A balloon should consider:
The goal should not simply be finding the lowest monthly repayment.
Asset finance pre-approval is an initial assessment before the final equipment purchase is completed.
It can help establish:
This can be useful if the business needs to:
Pre-approval remains subject to the lender's conditions and the final asset.
No.
A lender may still need to confirm:
Ask what has been approved and what remains outstanding before committing to the purchase.
There are several practical ways to reduce avoidable delays.
Know:
If the current ABN is new but the underlying business is established, explain that.
Do not wait for the lender to request them.
Have recent business bank statements available where possible.
For a newer ABN, make previous industry experience clear.
If available, provide:
The lender needs the complete financial picture.
Leaving debts out can cause delays later.
TAFS starts with a soft credit check before the formal lender application.
This allows the credit position to be reviewed without immediately creating a formal lender enquiry.
Provide:
If a deposit or trade-in is available, have the amount ready.
Once the lender asks for information, supplying it quickly can materially affect the approval timeframe.
Not every lender approaches young businesses the same way.
For example:
May require longer trading history.
May consider a newer ABN with strong bank statements.
May place significant weight on previous industry experience.
May accept low doc applications but have different asset requirements.
The business has not changed between those lenders.
The credit criteria have.
TAFS compares the application against more than 80 bank and non-bank lenders before selecting an option for formal submission.
TAFS does not simply send the same application to a large number of lenders.
The process starts by understanding:
The internal credit team can then compare lender criteria before one formal submission is made.
This helps keep the application targeted.
TAFS reviews:
TAFS begins with a soft credit check that leaves no formal enquiry on the applicant's credit file.
The internal credit team assesses the application before the formal lender submission.
TAFS has access to more than 80 bank and non-bank lenders.
The application can be matched based on:
TAFS can review:
Once the appropriate option has been selected, the formal application is submitted to that lender.
Straightforward applications can be approved in as little as 24 hours once the required information is available.
TAFS coordinates the remaining lender requirements, finance documents and payment to the equipment seller.
Before applying, have as much of the following ready as possible:
|
Area |
Information |
|
Identity |
Driver's licence |
|
Business |
ABN, registration date and structure |
|
Experience |
Previous industry background |
|
Banking |
Recent business bank statements |
|
Work |
Current contracts, customers or upcoming jobs |
|
Existing debt |
Equipment, vehicle and business loans |
|
Credit |
Details of any known credit issues |
|
ATO |
ATO debt and payment arrangement if applicable |
|
Equipment |
Asset type, make, model and year |
|
Purchase |
Price and seller |
|
Deposit |
Cash contribution or trade-in |
|
Settlement |
Invoice, serial number and insurance where required |
Not every lender will require every item.
There is no single minimum ABN age across every Australian commercial asset finance lender.
Some prefer established businesses.
Selected lenders can consider newer ABNs depending on industry experience, business activity, financial position and the asset.
Potentially.
Relevant industry experience, current work, bank statements, working capital, credit history and the proposed equipment can support the application.
Potentially.
ABN age requirements vary between lenders.
A business with less than 12 months of trading history may still have options.
Not with every lender.
Selected lenders consider shorter trading histories.
Yes.
Straightforward applications can be approved in as little as 24 hours once all required information is available.
Newer or more involved businesses may require additional assessment.
Prepare your business information, bank statements, equipment details and current work information before applying.
Matching the application with an appropriate lender before formal submission can also reduce unnecessary delays.
Not always.
Selected lenders may offer low doc equipment finance using recent bank statements and other supporting information.
Not with every lender.
The requirements depend on the business, asset, finance amount and lender.
Potentially.
Sole traders can apply for commercial equipment finance and may qualify using ABN history, bank statements, industry experience, credit profile and current work.
Potentially.
Selected lenders can consider both newer ABNs and used commercial equipment.
The complete application and equipment need to fit the lender's criteria.
Yes, through selected lenders.
Private-sale equipment may require additional seller, ownership, security and valuation checks.
Yes, through selected lenders.
Pre-approval can help establish your likely finance position before bidding.
Not necessarily.
Deposit requirements depend on the complete application and lender.
Potentially.
Selected applications may qualify to finance the full purchase price.
Yes, subject to the transaction.
Available equity in existing equipment can potentially reduce the amount being financed.
Potentially.
A balloon may reduce regular repayments but leaves a larger amount payable at the end.
TAFS can arrange eligible finance for commercial vehicles, earthmoving equipment, agricultural machinery, manufacturing machinery, forklifts, trade equipment and other income-producing commercial assets.
TAFS primarily arranges chattel mortgage finance for eligible commercial assets.
No.
TAFS reviews the application, completes a soft credit check, assesses it internally, compares suitable lenders and then makes one formal application to the selected lender.
A newer ABN does not automatically mean a business needs to wait before financing the equipment required to take on work or increase capacity.
The key is understanding which lender criteria fit the business today.
TAFS can review your ABN history, industry experience, current work, bank statements, credit position and proposed equipment before comparing suitable commercial asset finance options through access to more than 80 bank and non-bank lenders.
For straightforward applications with the required information available, approval can be arranged in as little as 24 hours.
The Asset Finance Shop (TAFS) is a commercial asset finance brokerage based in Sydney.
Information on this page is general in nature and doesn't take your personal circumstances into account. Speak to a TAFS broker for options tailored to your business, and to your accountant regarding tax treatment.