Quick Answer
Choosing between a broker vs bank for equipment finance in Australia involves weighing access to lenders, rates, flexibility, and expertise. While major banks offer direct equipment loans with typically stricter criteria, specialist equipment finance brokers provide access to over 100 lenders, often leading to more competitive rates, tailored solutions, and streamlined application processes. Indicative rates typically range from 7-12% p.a. in 2026 (indicative only) depending on business profile and market conditions. Settlements are possible within 24-48 hours for straightforward applications (subject to lender and circumstances), though overall timeframes can vary from a few days to a week or more. Brokers often secure better terms by comparing multiple options, making them a strong choice for diverse business profiles.
| Feature | Direct to Bank | Equipment Finance Broker |
|---|---|---|
| **Lender Access** | Single bank's products | 100+ lenders (major banks, non-banks, specialists) |
| **Product Range** | Standard chattel mortgage, hire purchase | Diverse options, tailored solutions |
| **Indicative Rates** | 7-12% p.a. (often higher for non-ideal profiles) | 7-12% p.a. (often more competitive due to comparison) |
| **Eligibility** | Stricter, 2+ years trading often required | More flexible, caters to newer businesses, low-doc |
| **Speed** | Can be slower, more paperwork | Streamlined, faster initial decisions (digital processing) |
| **Expertise** | Bank's own products | Independent, market-wide advice, specialist negotiation |
| **Negotiation Power** | Limited | Stronger, leverages relationships with multiple lenders |
| **Fees** | Bank fees, sometimes establishment fees | May have broker fee (often lender-paid), but can save overall |
Rates are indicative examples only. Actual rates depend on individual circumstances and lender assessment.
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By the Loan Phone team · Reviewed by Anthony Moncada, M.App.Fin, Cert IV Finance & Mortgage Broking, Director
Understanding Equipment Finance in Australia
For Australian businesses, acquiring essential equipment – from commercial vehicles and heavy machinery to office technology and medical devices – is crucial for growth and operational efficiency. Equipment finance provides the capital without tying up your working cash flow. Common structures include the Chattel Mortgage, Commercial Hire Purchase, and Finance Lease. Each offers distinct tax implications and ownership structures, making the choice complex for business owners.
A chattel mortgage is a popular secured loan structure where your business owns the equipment from the outset, with the lender taking a mortgage over the asset as security. This often allows businesses to claim the full GST input tax credit upfront and potentially depreciate the asset. Alternatively, a commercial hire purchase sees the lender purchase the equipment, then hire it to your business with an option to purchase at the end of the term. For a deeper dive into these options, explore our comprehensive Asset Finance Australia guide.
Equipment Finance: Broker vs. Bank – The Core Differences
When seeking equipment finance in Australia, businesses typically face two primary avenues: applying directly to a bank or working with a finance broker. Understanding the fundamental differences between these approaches is key to making an informed decision for your business.
Direct to a Bank: The Traditional Path
Major banks like Commonwealth Bank (CBA), NAB, Westpac, and ANZ have dedicated business lending divisions. Going direct means you approach one institution, navigate their specific application process, and are offered their range of products. This path is often chosen by businesses with an existing banking relationship, strong financials, and a preference for dealing with a single entity. However, banks are generally more risk-averse and may have less flexibility in their offerings.
Partnering with an Equipment Finance Broker: The Modern Approach
An equipment finance broker acts as an intermediary between your business and a wide panel of lenders. Instead of approaching multiple banks individually, a broker does the legwork for you. Modern comparison platforms, such as Loan Phone, allow brokers to rapidly assess your business needs against criteria from 100+ lenders—including major banks, specialist equipment financiers, and non-bank lenders. This approach is designed to find the most suitable and competitive finance options available in the market.
Key Factors to Compare
Let’s break down the critical aspects when comparing a broker vs bank for equipment finance.
Access to Lenders and Options
- Bank: Limited to their own product range. If your business or equipment doesn’t fit their specific criteria, you might be declined or offered less favourable terms. They typically offer standard chattel mortgages or hire purchase agreements.
- Broker: Provides access to a vast network of lenders. This includes all major banks, plus specialist equipment financiers, smaller regional banks, and non-bank lenders. This means a broker can often find solutions for unique assets, newer businesses, or those with complex financial situations where a single bank might decline. They can compare chattel mortgages, hire purchase, and sometimes finance leases.
Interest Rates and Fees
- Bank: Rates can be competitive for their ideal customer profile (established, strong financials). However, if you don’t fit perfectly, their rates might be higher or options limited. Their fees are typically transparent but non-negotiable.
- Broker: By comparing multiple offers, a broker can often secure more competitive interest rates. They understand lender appetites and can leverage relationships to negotiate on your behalf. While a broker may charge a fee (often paid by the lender), the overall savings from a better rate or more suitable structure can significantly outweigh this. Indicative rates in 2026 typically range from 7-12% p.a. for Australian businesses, with specialist brokers often able to achieve rates on the lower end for strong profiles due to broader market access.
Eligibility Criteria and Flexibility
- Bank: Generally have strict and often inflexible eligibility criteria. Most traditional banks require a minimum of 2 years trading history, strong financial statements, and a clear credit history. Newer businesses or those with specific industry challenges may struggle to qualify.
- Broker: Offers greater flexibility. With access to specialist lenders who cater to specific niches, brokers can often secure finance for businesses with less than 2 years trading, low-doc requirements, or those with previous credit challenges. They can also navigate complex asset types, such as specialised manufacturing equipment or unique commercial vehicles like those discussed in our Semi-Trailer Finance guide.
Speed and Efficiency
- Bank: The application process can be lengthy, involving extensive paperwork and multiple points of contact. Decision-making can be slow, especially for larger or more complex loans.
- Broker: Streamlines the process significantly. By understanding each lender’s requirements, a broker can package your application efficiently, reducing back-and-forth. Modern comparison platforms allow for rapid initial assessments and digital document handling, often leading to quicker approval decisions – sometimes within 24-48 hours for straightforward applications, though settlement timeframes vary.
Expertise and Support
- Bank: Your direct contact at a bank is typically a general business banker. While knowledgeable about their products, they cannot advise on competitor offerings.
- Broker: Provides impartial advice across the market. They are experts in equipment finance, understanding the nuances of different loan structures, tax implications (though always consult your accountant), and lender policies. They offer ongoing support throughout the application and can troubleshoot issues that arise. This specialist support is invaluable for navigating the complexities of finance.
Broker vs. Bank Equipment Finance Comparison Table
| Feature | Direct to Bank | Equipment Finance Broker (e.g., Loan Phone) |
|---|---|---|
| **Lender Access** | Single bank's products | 100+ lenders (major banks, non-banks, specialists) |
| **Product Range** | Standard chattel mortgage, hire purchase | Diverse options, tailored solutions |
| **Indicative Rates (2026)** | 7-12% p.a. (often higher for non-ideal profiles) | 7-12% p.a. (often more competitive due to comparison) |
| **Eligibility** | Stricter, 2+ years trading often required | More flexible, caters to newer businesses, low-doc |
| **Speed** | Can be slower, more paperwork | Streamlined, faster initial decisions (digital processing) |
| **Expertise** | Bank's own products | Independent, market-wide advice, specialist negotiation |
| **Negotiation Power** | Limited | Stronger, leverages relationships with multiple lenders |
| **Fees** | Bank fees, sometimes establishment fees | May have broker fee (often lender-paid), but can save overall |
Rates are indicative examples only, current as of 2026. Actual rates, fees, and terms depend on individual circumstances, lender assessment, and market conditions.
Who Should You Choose for Your Business?
The decision between a broker vs bank for equipment finance ultimately depends on your specific business situation and priorities.
When a Bank Might Be Best
If your business is well-established (2+ years trading), has strong financials, a pristine credit history, and you have an existing, positive relationship with a major bank, going direct might be a straightforward option. You know their processes and are comfortable with their offerings.
When a Broker Shines
For most other scenarios, an equipment finance broker often provides a superior service. This is particularly true if:
- You’re a newer business (under 2 years trading).
- You need finance for a specialist or “left-of-centre” asset.
- Your credit history isn’t perfect.
- You want to ensure you’re getting the most competitive rate and suitable terms from the entire market.
- You value expert advice and a streamlined, efficient application process.
Modern comparison platforms like Loan Phone combine fast online comparison with the invaluable expertise of specialist brokers. This means you get the best of both worlds: broad market access and personalised guidance, ensuring your business secures the right equipment finance solution.
Example: Financing a Commercial Vehicle
Scenario: Financing a $75,000 Isuzu N-Series Truck
| **Scenario** | Sydney-based landscaping business, 18 months trading |
| **Asset Cost** | $75,000 |
| **Direct to Bank (Example)** | Indicative rate: 11.5% p.a. over 3 years, substantial deposit |
| **Estimated Monthly Repayment (Bank)** | ~$2,470 |
| **Through a Broker (Example)** | Indicative rate: 9.5% p.a. over 4 years, smaller/no deposit |
| **Estimated Monthly Repayment (Broker)** | ~$1,900 |
This example is for illustrative purposes only. Actual rates, terms, and repayments depend on lender assessment, your individual circumstances, and current market conditions. Consult your accountant regarding tax implications.
Frequently Asked Questions
Is it better to use a broker or bank for equipment finance? +
For most Australian businesses, using a specialist equipment finance broker is often better as they provide access to a wider range of lenders (including major banks and non-bank specialists), potentially securing more competitive rates and flexible terms tailored to your specific needs. See Equipment Finance: Broker vs. Bank – The Core Differences for a detailed comparison.
What are the advantages of an equipment finance broker? +
Equipment finance brokers offer several advantages, including access to over 100 lenders, expert guidance through complex finance structures like chattel mortgages and hire purchase, the ability to find solutions for unique business profiles (e.g., newer businesses, low-doc), and a streamlined application process that can lead to faster approvals.
Do banks offer better rates for equipment loans? +
While major banks like CBA and NAB can offer competitive rates for established businesses with strong financials, a broker can often secure better or equivalent rates by comparing offers from multiple lenders, including specialist financiers, ensuring you get the most suitable option for your specific circumstances. Refer to Interest Rates and Fees for more information.
How quickly can I get equipment finance? +
Initial credit decisions for straightforward equipment finance applications may be provided within 24-48 hours through a streamlined broker process. However, total settlement timeframes vary based on documentation submission, lender processing, and vendor coordination, typically ranging from a few days to a week or more.
What documents are needed for equipment finance? +
Typically, lenders require basic business documentation such as ABN details, bank statements (usually 6-12 months), and details about the equipment being financed (e.g., supplier invoice). For larger loans or newer businesses, additional financial statements may be requested, but specialist brokers aim to keep documentation simple.
Can I get equipment finance for a new business? +
Yes, new businesses can often secure equipment finance, though traditional banks may have stricter requirements. Specialist equipment finance brokers work with lenders who cater to newer operators, sometimes requiring personal guarantees or higher deposits, but offering viable pathways to funding essential assets.
Get Equipment Finance for Your Business
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Related Resources
Explore these related guides for business owners and ABN holders:
Disclaimer: This article provides general information only and should not be relied upon as financial or tax advice. Rates, terms, and eligibility vary by lender and individual circumstances. Tax benefits are subject to your specific business structure and circumstances. Always seek independent professional advice from a qualified accountant and financial adviser before making financing decisions.
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Last updated: 2026-01-29