Quick answer
Machinery and plant finance pays for heavy equipment like excavators, forklifts, tractors, CNC machines and production lines over time. New, resaleable machines are often financed against themselves; used, specialised or auction machines are often easier to fund with an unsecured business loan or a property-backed loan. The term should match the machine's working life, and the repayments should be covered by the work or savings it brings in.
Key points
- Heavy gear has a long life, so a longer term is usually sensible.
- Used and specialised machines can be hard to finance against themselves.
- Property-backed loans suit big or multiple machine purchases.
- Work out what the machine earns or saves each month before you borrow.
- Common purchases
- Excavators, forklifts, tractors, CNC, production lines
- Structures
- Equipment-secured, unsecured, property-backed
- Unsecured range
- Typically $5,000 to $500,000
- Secured range
- $20,000 to $5,000,000 against property
A good machine pays for itself many times over. An excavator that stops you subcontracting out dig work, a second forklift that clears the dock before lunch, a CNC router that lets you take on joinery you used to turn away. Machinery and plant finance spreads the cost over the years the machine earns, so the business doesn’t have to find a six-figure sum on day one.
What kinds of machinery do businesses finance?
Almost anything that does work:
- Earthmoving and construction: excavators, skid steers, bobcats, rollers, tippers.
- Materials handling: forklifts, reach trucks, pallet wrappers, scissor lifts.
- Manufacturing: CNC machines, presses, lasers, packaging lines.
- Agriculture: tractors, harvesters, sprayers, implements.
- Workshop: hoists, compressors, welders, diagnostic equipment.
Which funding structure fits which machine?
| Machine | Usually best fit | Why |
|---|---|---|
| New excavator from a dealer | Equipment-secured finance | Clear resale value, long life |
| Five-year-old forklift from a private seller | Unsecured loan | Many asset financiers avoid private used sales |
| Custom production line | Property-backed loan | Little resale market, long payback |
| Three machines plus attachments | One unsecured or property-backed facility | Simpler than three contracts |
| Machine needed for one contract only | Hire, or short-term funding | Don’t own what you’ll only use once |
If you’re unsure about the difference between structures, start with asset finance explained.
How do you work out whether the machine pays its way?
Before talking to any lender, put rough numbers on it:
- What it earns or saves each month. New jobs you can take, subcontractor bills you stop paying, overtime you avoid.
- What it costs to run. Fuel, servicing, insurance, operator time.
- The repayment. Purchase price plus total finance cost, spread over the term.
If monthly earnings minus running costs comfortably covers the repayment, the machine pays for itself. Our purchase payback calculator does this sum for you and shows how much cash you keep by financing rather than paying outright.
Illustrative example. A Sunshine Coast civil contractor spends about $7,500 a month hiring a 5-tonne excavator. A three-year-old machine costs $95,000. Running costs add about $1,500 a month. Financed over five years, the repayment plus running costs comes in below the hire bill, and the business owns a machine worth a decent sum at the end. Hiring only wins if the work dries up, so the owner checks the forward order book before signing.
What should you check before buying used machinery?
- A PPSR search. For a couple of dollars it shows whether someone else has a security interest registered over the machine.
- Hours and service history. A cheap machine with no records can cost more than a dearer one with a full logbook.
- Inspection by someone who knows the gear. Especially for hydraulics and undercarriage.
- Attachments and transport. Buckets, forks and delivery can add thousands.
- GST. Buying from a registered business usually includes GST you may be able to claim back; private sales usually don’t.
How does tax timing affect a machinery purchase?
Small businesses with turnover under $10 million can write off eligible assets costing under $20,000 each in the year they’re first used or installed. Most heavy machinery costs more, so it goes into the simplified depreciation pool: 15 per cent in the first year and 30 per cent each year after. Buying just before 30 June can bring the first-year deduction forward, but only if the machine is actually installed and ready to use. Talk to your accountant, and see our guide on the instant asset write-off and finance.
What about maintenance and downtime?
A machine only earns while it’s running. When planning the purchase and the repayment, account for:
- Scheduled servicing at the manufacturer’s intervals, which can mean a day or two off the job each time.
- Wear parts such as tracks, teeth, tyres, hoses and filters.
- Unplanned breakdowns, especially on older machines. A repair buffer in the bank avoids scrambling for emergency funds.
- Operator training and tickets for staff who’ll use it.
- Insurance, including cover while the machine is on a client’s site or being transported.
A machine that’s cheap to buy but often off the job for repairs can cost more in lost work than a newer machine with a higher repayment. If uptime matters, factor in dealer support and parts availability in your area, particularly for regional work.
It’s also worth thinking about what you’ll do with the machine at the end of its working life with you. A well-maintained, popular model holds its resale value, which lowers the true cost of ownership and can provide a deposit for its replacement. Keep the service records and receipts; they add real value when you sell.
Need a machine that earns its keep?
If a machine would let you take on more work or stop paying someone else to do it, let’s see how to fund it. Asking us doesn’t involve a credit check; that only happens if you decide to go ahead. Your enquiry isn’t fired off to a pile of lenders. A real person looks at the machine, the work and the business, then calls you with a structure that fits.
Please be accurate about the machine, its price, whether it’s new or used and who’s selling it. It makes the first option we bring you the right one. Start your machinery enquiry.
Frequently asked questions
Can I finance a second-hand excavator or forklift?
Yes. Some equipment financiers set age limits, especially for private or auction sales, but an unsecured business loan or a property-backed loan doesn't depend on the machine's age. Get a PPSR search before buying used to make sure there's no finance owing on it.
How long should I finance machinery for?
As long as it earns money for you, and no longer. A well-maintained excavator or tractor can work for many years, so five years or more is common for new heavy gear. A machine you expect to replace in three years should be paid off in three.
Should I buy or hire machinery?
If you'd use it most weeks, owning usually wins over time. If you need it for a few jobs a year, hiring may be cheaper and saves maintenance. Compare a year of hire costs with a year of repayments plus running costs.
Can I claim machinery under the instant asset write-off?
Only assets costing less than $20,000 each qualify for the instant write-off for small businesses under $10 million turnover. Most heavy machinery costs more, so it goes into the small business depreciation pool instead. Your accountant can confirm the treatment.
What if I need several machines at once?
Wrapping them into one property-backed or unsecured facility can be simpler than separate contracts for each. It also lets you include delivery, attachments and installation, which asset finance sometimes won't cover.