How to Get Equipment Finance for a New Business in Australia
One of the most common questions we receive from new business owners is whether they can get equipment finance before they have an established trading history. The answer is yes — but the application needs to be structured correctly and submitted to the right lenders. This guide explains exactly what specialist lenders look for when assessing a new business equipment application, what you can do to maximise your approval chances, and what to expect in terms of rates and conditions.
The Core Challenge: Why Major Banks Say No to New Businesses
Major banks assess equipment finance applications primarily on financial history — typically 2 years of tax returns and audited financial statements. A new business with a 3-month ABN has no financial history to present. The bank sees an unknown risk and declines. This is not a judgment on the business's viability — it is a structural limitation of how major banks assess applications.
Specialist equipment lenders assess applications differently. They look at the totality of the situation: the director's industry experience, the specific asset being purchased, the strength of the business case, and the personal credit profile of the director. A new business application that would be declined by a major bank in 60 seconds can be approved by a specialist lender in 48 hours — with the right broker, the right lender, and the right documentation.
What Specialist Lenders Look For in a New Business Application
1. Director's Industry Experience
The most important factor in a new business equipment application is the director's demonstrable experience in the relevant industry. A carpenter starting their own business after 10 years working for a construction company is a materially different risk to a first-time business owner with no industry background. Lenders want to see that the person running the business understands the industry, the market, and how the equipment will generate income. Document your experience — former employer letters, trade qualifications, licences, certifications.
2. A Signed Commercial Lease
A signed lease for your business premises signals to lenders that the business has a physical home and a committed operating cost structure. It demonstrates that you have made a real commitment beyond registering an ABN. If you are operating from a home workshop or office, lenders may ask for a home ownership statement or rental agreement. A commercial lease is stronger.
3. A Formal Supplier Quote
The application must include a formal written quote from the supplier confirming the specific make, model, serial number, condition and price of the equipment being financed. This is not optional. The lender is assessing the asset as security — they need to know precisely what they are lending against. A vague description of 'workshop equipment' is not sufficient. A specific quote for a 'Kaeser SK 22 rotary screw air compressor, model year 2024, new, serial number XXXXXX, price $18,500 ex GST' is what is needed.
4. Clean Personal Credit
For a new business with no trading history, the director's personal credit file is the primary creditworthiness indicator available to the lender. A clean personal credit history — no defaults, no judgments, no excessive recent enquiries — significantly improves approval prospects. Check your credit file before applying at equifax.com.au (free once per year). Any errors or incorrect listings should be disputed and corrected before you apply.
5. A Deposit of 20% to 30%
A deposit reduces the lender's exposure and demonstrates financial commitment from the borrower. For new business applications, most specialist lenders want to see a deposit of 20% to 30% of the asset's value. This is not always mandatory but it materially improves both approval chances and the rate offered. A $60,000 excavator application with a $15,000 deposit (25%) is a stronger proposition than the same application with no deposit.
What Equipment Can a New Business Finance?
Most categories of business equipment are financed for new businesses through specialist lenders, provided the other eligibility factors are in place. Common equipment categories include construction plant and earthmoving equipment, workshop machinery, commercial vehicles and trucks, agricultural tractors and implements, medical and dental equipment, food service equipment, technology hardware, and professional tools and tradesperson equipment.
The key requirement is that the equipment must be used primarily for business income generation — not personal use. The lender will ask how the equipment will be used and how it will generate revenue to service the loan.
What Rate and Terms Can a New Business Expect?
New business equipment finance through specialist lenders typically attracts rates at the higher end of the market — approximately 9% to 14% per annum depending on the asset, deposit, and director credit profile. This is higher than rates available to established businesses with 2 to 3 years of profitable trading history (which access rates from approximately 6.5% to 9%). The rate reflects the lender's higher perceived risk on a business without an established track record.
Loan terms are typically 2 to 5 years for new business applications, compared to up to 7 years for established businesses. As the business builds a trading history and the director demonstrates reliable repayments, subsequent applications attract better rates and longer terms.
Should I Apply to Multiple Lenders Simultaneously?
No. Each credit application generates a hard enquiry on the director's personal credit file. Multiple simultaneous applications — even to specialist lenders — generate multiple hard enquiries that are visible to all subsequent lenders and can signal credit stress. This makes each successive application harder. Use an independent finance broker who assesses your situation, identifies the single most appropriate lender, and submits one application. If that application requires adjustment, the broker manages the process without generating additional credit enquiries.
The Application Process Step by Step
Step 1: Gather your documentation — ABN registration, GST registration certificate, driver's licence, supplier quote for the specific equipment, evidence of industry experience (employment history, trade qualifications, licences), commercial lease or premises details, and 3 to 6 months of personal bank statements.
Step 2: Contact an independent finance broker. Explain your situation — business age, industry, equipment type, deposit available, personal credit history. The broker assesses which specialist lenders are appropriate and what the realistic approval prospects are before any application is submitted.
Step 3: The broker prepares and submits the application to the most appropriate lender. For new business applications, approval typically takes 2 to 5 business days rather than 24 to 48 hours, as specialist lenders conduct more detailed assessment.
Step 4: Conditional or unconditional approval is issued. You confirm the purchase with the supplier. The lender settles directly with the supplier. You take delivery and begin repayments.
Australian Finance & Loans arranges equipment finance for new and early-stage businesses through specialist lenders across our panel of 50+ financiers. Call 1300 194 926 or visit australianfinanceloans.com/startup-loans to discuss your specific equipment and situation.
