Equipment Finance Calculator Australia

Last updated: May 2026. Reflects current Australian metrics.

Structure your equipment or machinery loan to match your cash flow. Calculate repayments with a residual/balloon payment and estimate your tax savings.

Asset Details

$
$
%
20% $17,000

Monthly Repayment

Over the 3 year term

$0
Amount Financed $0
Total Interest Paid $0
Final Residual / Balloon Owed $0

Equipment Finance in Australia

Whether you are purchasing a new tractor for a farm, a fleet of delivery vans, or heavy machinery for construction, equipment finance allows you to spread the cost over the useful life of the asset while preserving your working capital.

Chattel Mortgage vs Lease

The most common form of equipment finance in Australia is the Chattel Mortgage. Under a Chattel Mortgage, you own the asset from day one, and the lender takes a 'mortgage' over it as security. Because you own it, you can claim depreciation and the GST Input Tax Credit on your next Business Activity Statement (BAS).

Alternatively, a Finance Lease or Operating Lease means the lender owns the asset and you simply rent it. You cannot claim the GST upfront, but the entire lease payment is usually tax-deductible. If you select an operating lease, you simply hand the equipment back at the end of the term.

The ATO Instant Asset Write-Off

The Australian Government frequently updates the Instant Asset Write-Off threshold (currently $20,000 for small businesses in the 2026-2026 financial year, though subject to legislative changes). If your equipment costs less than this threshold, you can immediately deduct the entire cost against your taxable income in the year it is installed and ready for use, rather than depreciating it slowly over several years. This applies even if you finance the equipment with a loan!

Why use a Residual or Balloon?

Heavy machinery depreciates. By adding a 20% or 30% residual to your loan, you match the loan repayments more closely to the actual depreciation of the asset. This frees up monthly cash flow. At the end of the term, you trade the machinery in, use the trade-in value to clear the residual debt, and take out a new loan for a brand new machine.

Related Calculators

Business Loan Equipment Finance Invoice Finance

Read official business finance guidelines at Business.gov.au.

10 Frequently Asked Questions

1. What is Equipment Finance?
Equipment finance (like a chattel mortgage) allows a business to borrow money to buy an asset, using the asset itself as security.
2. How does Invoice Financing work?
Invoice financing lets you borrow money against the amounts due from your customers, freeing up immediate cash flow.
3. What is an Unsecured Business Loan?
A loan that doesn't require collateral. It usually has higher interest rates and shorter terms due to the higher risk for the lender.
4. Can I claim the interest on a business loan?
In Australia, interest incurred on loans used strictly for business purposes is generally tax-deductible. Check with the ATO.
5. What is the instant asset write-off?
An ATO measure allowing businesses to claim an immediate deduction for the business portion of the cost of an asset in the year it is first used.
6. What is a line of credit?
A flexible loan where you are approved for a certain limit but only pay interest on the funds you actually draw down.
7. Are Directors Guarantees required?
Most lenders will require a personal guarantee from the company directors, even for unsecured business loans.
8. What is a Chattel Mortgage?
A commercial loan product where the financier advances funds to purchase an asset, taking a mortgage over it as security.
9. How do lenders assess business loans?
Lenders look at trading history, cash flow, BAS statements, and business credit scores.
10. Does a business loan affect my personal credit?
If you provide a personal guarantee or are a sole trader, defaults will negatively impact your personal credit file.