Machinery finance options in Australia include chattel mortgages, equipment loans, finance leases, and hire purchase agreements for industrial equipment. Indicative rates vary by lender, asset, and borrower profile; publicly available examples range from around 6.59% p.a. to 15% p.a. (indicative only, subject to individual circumstances), with loan amounts varying by lender and asset size and terms of 2-7 years depending on machinery type. Each structure offers different tax implications and ownership arrangements. Chattel mortgages are commonly used by established manufacturers wanting immediate ownership and potential tax deductions, while finance leases suit businesses preferring to upgrade equipment regularly.
For manufacturing businesses, industrial operations, and production companies, machinery represents significant capital investment. Choosing the right finance structure for industrial equipment affects not just your cash flow, but also your tax position and long-term operational flexibility.
Australian businesses have several machinery finance options, each designed for different situations. Understanding which structure fits your business can make the difference between smart financing and an expensive mistake.
It’s important to note that while equipment finance structures are broadly consistent, their tax treatment and your eligibility for certain options depend heavily on your specific business circumstances and current Australian tax legislation. Buyers should confirm all tax outcomes with their accountant or the ATO.
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The Main Machinery Finance Structures
Chattel Mortgage for Machinery
A common choice for established manufacturers. You own the equipment immediately, claim the full GST credit upfront (if registered), and may deduct depreciation and interest depending on your tax circumstances. Buyers should confirm tax outcomes with their accountant or the ATO.
- How it works: You purchase and own the machinery from day one. The lender provides funds and holds security over the equipment until you’ve paid off the loan.
- Tax treatment: Interest and depreciation may be deductible depending on structure and business use. Subject to your individual circumstances, you may also claim upfront GST input tax credits for GST-registered businesses. Buyers should confirm tax outcomes with their accountant or the ATO.
- Best for: Profitable manufacturing businesses wanting potential tax deductions and long-term equipment ownership.
- Typical terms: 3-7 years depending on machinery type and useful life
- Indicative rates: Rates vary by lender, asset, and borrower profile (subject to individual circumstances)
Learn more about chattel mortgage structures.
Equipment Loan (Secured)
A straightforward secured loan where you own the machinery from day one, with the lender holding security.
- How it works: Borrow funds to purchase machinery, own it immediately, repay over an agreed term with the equipment as security.
- Tax treatment: Similar to a chattel mortgage—interest and depreciation may be deductible depending on structure and business use. Buyers should confirm tax outcomes with their accountant or the ATO.
- Best for: Simple, transparent machinery purchases with standard industrial equipment.
- Typical terms: 3-7 years
- Indicative rates: Rates vary by lender, asset, and borrower profile (subject to assessment)
Finance Lease for Machinery
The lender owns the machinery and you lease it for a fixed term. At the end, you can return it, upgrade, or purchase at market value.
- How it works: The lender purchases the machinery and leases it to you. You make regular lease payments and have options at the term end.
- Tax treatment: Lease payments may be deductible as operating expenses, depending on your circumstances. The lender claims depreciation. Buyers should confirm tax outcomes with their accountant or the ATO.
- Best for: Businesses wanting to keep production equipment current, preferring consistent operating expenses, or with complex tax structures.
- Typical terms: 3-5 years
- Indicative rates: Rates vary by lender, asset, and borrower profile (subject to assessment)
For broader equipment finance guidance, see our equipment finance Australia guide.
Hire Purchase for Machinery
Provides immediate use while you pay off the equipment, with automatic ownership transfer after the final payment.
- How it works: The lender purchases machinery, you hire it while making payments, and ownership transfers after the last payment.
- Tax treatment: You may claim depreciation and the interest portion of repayments, depending on your tax circumstances. Buyers should confirm tax outcomes with their accountant or the ATO.
- Best for: Businesses wanting eventual ownership with a structured payment path.
- Typical terms: 3-7 years
- Indicative rates: Rates vary by lender, asset, and borrower profile (subject to assessment)
Common Industrial Machinery Financed
Manufacturing Equipment:
- CNC machines and lathes
- Milling and grinding equipment
- Injection moulding machines
- Assembly line equipment
- Industrial robots and automation
Material Handling:
- Forklifts and reach trucks
- Pallet jacks and stackers
- Overhead cranes
- Conveyor systems
Processing Equipment:
- Industrial ovens and kilns
- Mixing and blending machinery
- Packaging equipment
- Quality control systems
Construction & Civil:
- Excavators and earthmoving equipment
- Concrete equipment
- Road construction machinery
For construction equipment specifically, see our excavator finance guide.
Comparing Machinery Finance Options
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