Excavator Finance: Complete Guide for Australian Construction Businesses

Excavator finance in Australia enables construction businesses to acquire earthmoving equipment through chattel mortgages, equipment loans, or finance leases. In 2025, rates typically range from 7-12% p.a. (indicative only, subject to individual circumstances), with loan amounts from $20,000 to $500,000+ for excavators ranging from compact 1.5-tonne mini excavators to 30-tonne+ machines. Terms usually span 3-7 years depending on machine size and usage. Tax benefits may include depreciation deductions and immediate GST credits for established businesses. Settlements possible within days for contractors with solid trading history and established equipment suppliers.

For construction businesses, civil contractors, and earthmoving operators, an excavator represents both a significant capital investment and an essential income-generating asset. Whether you’re a sole trader buying your first 5-tonne digger or an established contractor adding a 20-tonne machine to your fleet, excavator finance provides a tax-effective way to acquire equipment without depleting working capital.

Why Finance an Excavator?

Excavators typically cost between $30,000 for a compact mini excavator to $300,000+ for larger machines. Paying cash ties up funds you need for wages, fuel, maintenance, and other business expenses. Finance spreads this cost over the machine’s productive life while potentially providing tax advantages.

For many contractors, the additional work an excavator enables more than covers the repayments, making the finance essentially self-funding.

Excavator Finance Options

Chattel Mortgage

The most popular choice for excavator finance. You own the machine immediately, claim the full GST credit upfront (if registered), and may deduct depreciation and interest subject to your tax circumstances.

• Best for: Established earthmoving businesses wanting maximum tax benefits
• Typical terms: 3-7 years depending on machine size
• Indicative rates: 7-11% p.a. for strong applications (subject to individual circumstances)

Learn more about chattel mortgage structures.

Equipment Loan

A straightforward secured loan where you own the excavator from day one, with the lender holding security.

• Best for: Simple, transparent excavator purchases
• Typical terms: 3-7 years
• Indicative rates: 7-12% p.a. (rates vary by circumstances)

Finance Lease

The lender owns the excavator and you lease it. At term end, you can return it, upgrade to a newer model, or purchase at market value.

• Best for: Contractors wanting to upgrade equipment regularly or preferring consistent operating expenses
• Typical terms: 3-5 years
• Indicative rates: 8-13% p.a. (subject to assessment)

For broader equipment finance guidance, see our equipment finance Australia guide.

Common Excavators Financed

Mini Excavators (1-6 tonnes):

• Compact urban excavators
• Landscaping and tight-access diggers
• Residential construction equipment
• Typical cost: $30,000-$120,000

Mid-Range Excavators (6-15 tonnes):

• General construction excavators
• Civil works machines
• Versatile multi-purpose diggers
• Typical cost: $120,000-$250,000

Large Excavators (15-30+ tonnes):

• Heavy civil construction
• Mining and quarry equipment
• Major earthmoving projects
• Typical cost: $250,000-$500,000+

For construction-specific financing options, explore our construction equipment finance guide.

What Excavator Lenders Consider

• Trading history: Most lenders prefer 12-24 months of business operation, though some specialists may consider newer businesses with strong industry experience.
• Credit history: Both business and personal credit scores matter, particularly for sole traders and smaller companies.
• Cash flow: Evidence you can service repayments even during quieter periods.
• Machine details: Brand, model, age, hours, and condition. Well-known brands (Caterpillar, Komatsu, Hitachi, Volvo, Kubota) typically receive better terms.
• Supplier credibility: Purchasing from established dealers usually streamlines approval compared to private sales.
• Business use: Clear evidence the excavator will be used for income-generating business activity.

Tax Considerations for Excavator Finance

Excavator finance may offer several tax benefits, subject to your individual circumstances:

• Depreciation deductions: Claim the decline in value over the machine’s effective life (typically 6.67-12.5 years depending on use intensity).
• Interest deductions: Deduct the interest portion of finance repayments.
• Immediate GST credit: Claim full GST input tax credit upfront with chattel mortgages (for GST-registered businesses).
• Instant asset write-off: May be available for eligible businesses under current ATO thresholds.

Important: Tax benefits vary significantly based on your business structure, income level, and how you use the excavator. Always consult your accountant before making financing decisions.

Getting Excavator Finance Approved

Prepare strong documentation:

• Recent business financial statements
• Tax returns and BAS statements
• Bank statements showing consistent cash flow
• Detailed excavator quote with specifications

Choose the right supplier:

• Established dealers with lender relationships
• Clear purchase agreements
• Comprehensive machine specifications
• Warranty and service details

Understand your budget:

• Calculate realistic repayments
• Factor in operating costs (fuel, maintenance, insurance)
• Allow buffer for quieter work periods
• Consider seasonal cash flow variations

Compare your options:

• Different lenders offer varying rates and structures
• Specialist equipment finance providers often understand construction equipment better than general banks
• Broker comparison can access multiple lenders simultaneously

For broader asset finance comparisons, see our asset finance Australia overview.

New vs Used Excavators

New excavators:

• Better finance rates (typically 7-10% p.a.)
• Longer terms available (up to 7 years)
• Full manufacturer warranty
• Latest technology and efficiency
• Easier approval process

Used excavators:

• Higher finance rates (typically 9-12% p.a.)
• Shorter terms (usually 3-5 years)
• Lower purchase price
• May require larger deposits
• Age and hours affect approval

Lender preferences: Most lenders prefer excavators under 10 years old with documented service history. Machines from reputable dealers with warranty coverage receive better terms than private sales.

Common Excavator Finance Mistakes

• Underestimating total costs: Don’t forget insurance, registration, servicing, fuel, and operator costs when calculating affordability.
• Wrong loan term: Financing a 5-year-old excavator over 7 years often creates issues—match the term to the machine’s remaining productive life.
• Ignoring balloon payments: A large balloon payment can be useful for cash flow, but make sure you have a plan to pay or refinance it at term end.
• Buying wrong size: Finance enables bigger purchases, but operating costs rise significantly with machine size. A 20-tonne excavator costs much more to run than a 12-tonne machine.
• Private sales without inspection: Lenders prefer dealer sales for good reason—comprehensive inspections, warranties, and documented history reduce risk.

Excavator Finance Example

Scenario: Brisbane civil contractor financing a $150,000 Caterpillar 313 excavator (13-tonne class)

Finance Structure:

• Purchase price: $150,000 (including GST)
• Deposit: $15,000 (10%)
• Amount financed: $135,000
• Interest rate: 8.5% p.a. (example rate)
• Term: 5 years (60 months)
• Balloon payment: $30,000 (20% residual)
• Indicative Monthly Repayment: ~$2,240
• Total Cost Over 5 Years: ~$164,400 (including balloon)

This example is for illustration purposes only. Actual rates, terms, and repayments depend on lender assessment, your individual circumstances, and current market conditions. Consult your accountant regarding tax implications.

For details on chattel mortgage tax benefits, see our chattel mortgage vs lease comparison.

Compare Excavator Finance Options

Ready to finance your excavator?

Loan Phone provides fast comparison of excavator finance options from 100+ lenders including major banks and specialist construction equipment financiers.

• Fast Online Comparison — See personalised rates from multiple lenders in minutes
• Construction Equipment Specialists — Brokers who understand earthmoving and civil equipment
• Flexible Structures — Chattel mortgage, equipment loan, or lease options
• New & Used Equipment — Finance options for excavators of all ages and sizes
• Better Rates — Specialist lenders often provide better terms than major banks for construction equipment

Speak with specialists:

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Last updated: October 7, 2025