Used machinery financing helps Australian businesses purchase second-hand equipment without paying the full cost upfront. The purchase is funded over an agreed term, allowing the business to keep more cash available for wages, suppliers, maintenance and other operating expenses.
The Asset Finance Shop (TAFS) is a specialised asset finance broker with access to more than 80 bank and non-bank lenders, a 93% approval rate, low doc options and approvals available in as little as 24 hours for eligible applications.
Used machinery can be a practical investment for businesses that need additional capacity, want to replace aging equipment or have found a suitable machine through a dealer, private seller or auction.
This guide explains how used machinery finance works in Australia, what equipment can be funded, what lenders assess and how to prepare for a second-hand machinery purchase.
Yes. Australian ABN holders can finance eligible used machinery purchased through:
The machinery must usually be purchased for business use and meet the lender's requirements regarding its age, condition, value and expected working life.
Used equipment can include excavators, skid steers, loaders, tractors, manufacturing machinery, forklifts, agricultural equipment and other income-producing business assets.
The lender will assess both the applicant and the machinery before approving the finance.
The process will depend on where the machinery is being purchased and the type of equipment involved.
You can begin discussing your equipment loan before selecting the exact machine.
TAFS starts with a soft credit check that leaves no mark on your credit file. The internal credit team then reviews your:
Your circumstances are assessed against the criteria of more than 80 lenders before a formal application is submitted.
Once you have found the equipment, you will need to provide information such as:
The exact requirements will depend on the lender and the type of machinery.
Lenders have different policies for used equipment.
Some lenders are comfortable financing older machinery, private sales and auction purchases. Others place tighter limits on the age of the asset or require additional inspections.
TAFS compares suitable options based on the applicant, equipment and transaction.
Once you have selected a finance option, the application is submitted to the chosen lender.
This helps avoid unnecessary applications and multiple hard credit enquiries.
After approval, the lender completes its final equipment and seller checks.
Once the documents are signed and all settlement conditions have been met, the lender pays the approved funds directly to the dealer, auction house or private seller.
The main finance product TAFS arranges for used machinery purchases is a chattel mortgage.
Under a chattel mortgage, your business owns the machinery from settlement. The lender registers a security interest over the equipment until the finance has been repaid.
The loan can be structured with:
A balloon payment can reduce regular repayments, although it leaves a larger final amount payable at the end of the loan.
Your business may also be able to claim the GST on the purchase price, along with eligible interest and depreciation deductions. Speak with your accountant about the tax treatment that applies to your circumstances.
Used machinery finance can cover a broad range of industries and equipment types.
Approval remains subject to lender requirements regarding the age, condition, value and intended use of the equipment.
Dealer purchases are generally the most straightforward type of used machinery transaction.
The dealer can usually provide:
The lender may still require an inspection or valuation, particularly for older or higher-value machinery.
Buying through a dealer can also make settlement easier because the seller is familiar with providing documents to lenders.
Second-hand equipment financing can also be arranged for machinery purchased privately.
A private sale may provide access to equipment that is not available through a dealer, particularly when buying from another operator that is upgrading, retiring or selling surplus machinery.
The lender will usually need to confirm:
A private sale may require an inspection or valuation before settlement.
TAFS coordinates the required information between the buyer, seller and lender so the transaction can progress correctly.
Auction finance allows eligible businesses to arrange their finance position before bidding.
A pre-approval can provide an indication of the amount you may be able to borrow, but the final approval will still depend on the machinery purchased and the lender's requirements.
Before bidding, consider:
The auction house will generally need to provide an invoice after the successful bid.
Because auctions often have strict payment timeframes, preparing the finance application before bidding can help avoid settlement delays.
Used machinery lenders assess more than the purchase price.
Older machinery can still be financed, but lender options may become more limited as the asset ages.
The lender may consider how old the machinery will be at the end of the finance term.
The lender may ask for information about the machinery's condition, service history and operating hours.
Well-maintained equipment from a recognised manufacturer can be easier to assess.
The lender will compare the purchase price with the machinery's expected market value.
An inspection or valuation may be required if the equipment is older, specialised or being purchased privately.
The finance term should be appropriate for the remaining useful life of the machinery.
The lender will want to see that the equipment is likely to remain productive throughout the loan term.
The lender will consider how the equipment will be used and how it will contribute to business income.
This may include replacing hired machinery, completing work internally, increasing capacity or supporting a new contract.
The lender will also assess:
The complete application determines which lender and finance structure may be suitable.
A newer business can still qualify for used machinery financing.
Several lenders on the TAFS panel will consider ABNs registered for less than 12 months. These applications are assessed using the applicant's broader circumstances rather than relying only on business trading history.
A lender may consider:
A work source agreement may also be required for some start-up applications.
Used equipment can require additional checks, particularly when the machinery is older or being purchased privately.
Yes. Low doc business equipment loans may be available through selected lenders.
A low doc application can use recent bank statements and supporting business information instead of complete financial statements.
You may be asked to provide:
The lender may request additional information depending on the loan amount, machinery and age of the business.
Low doc does not mean no assessment. The lender still needs to confirm that the business can afford the repayments.
A deposit is not required for every used machinery purchase.
Some applicants can finance the full purchase price, subject to the lender's criteria and the value of the machinery.
A deposit may be requested when:
A trade-in can sometimes be used as the business's contribution to the purchase.
Used machinery can provide a lower-cost way to add equipment to a business.
A second-hand machine will usually cost less than a comparable new model.
This can reduce the amount financed and the regular repayments.
Used machinery may be available immediately, while some new equipment can involve manufacturing or delivery delays.
This can be important when the machine is needed for an upcoming contract.
New equipment can lose value quickly during its early years.
A used machine may have already passed through the steepest period of depreciation.
The same budget may allow the business to purchase a larger or better-equipped used machine than it could afford new.
The decision should still account for servicing, maintenance, operating hours and the expected remaining working life.
Used machinery finance can be approved in as little as 24 hours for a straightforward application with the required information available.
The process may take longer when it involves:
Preparing your identification, bank statements and business details early can help reduce delays.
A machinery investment should be assessed based on how the equipment will support the business.
Before purchasing, consider:
The lowest purchase price is not always the best overall option. A more reliable machine with a strong service history may provide better value over its working life.
Yes. Used machinery can be financed when purchased through a dealer, private seller or auction.
Approval is subject to the applicant's financial position and the lender's requirements regarding the equipment's age, condition, value and intended use.
Yes. Private-sale machinery finance is available through selected lenders.
The lender will need to verify the seller, ownership of the equipment, purchase price and machinery details. An inspection or valuation may also be required.
Yes. Auction pre-approval may be available so you can understand your finance position before bidding.
Final approval will depend on the machinery purchased and whether it meets the lender's requirements.
Yes. Sole traders can apply for used machinery finance.
Lenders may assess the applicant's ABN history, industry experience, bank statements, personal credit profile, existing work and the type of machinery being purchased.
Yes. Selected lenders will consider newer businesses and ABNs registered for less than 12 months.
The lender may request evidence of industry experience, upcoming work, a work source agreement, bank statements or a deposit.
Yes. Low doc options may be available through selected lenders.
The application may be assessed using recent business bank statements, ABN details, credit history and information about the machinery.
The existing finance must be cleared before or as part of settlement.
The lender or broker will usually complete a search to identify any registered security interests over the equipment. The payout process must be completed correctly before ownership transfers to the buyer.
Yes. Machinery attachments can often be included in the same finance facility when they form part of the purchase.
This can include buckets, augers, forks, blades and other equipment required to operate the machine.
Approvals can be available in as little as 24 hours for straightforward applications.
Settlement timing will depend on lender checks, seller documentation, equipment inspections and the completion of finance documents.
Ready to purchase used machinery for your business?
Start with a no-obligation assessment and a soft credit check that leaves no mark on your file. Contact The Asset Finance Shop or apply online at www.tafs.com.au.
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.