Equipment Finance Business Loans

Mozo has analysed many of the equipment loans on the market, ready for you to compare!

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Equipment finance business loan comparisons on Mozo - last updated 14 June 2024

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Must knows about equipment finance

As a business it's more than likely that at some point you’ll find yourself needing equipment, this can be larger items like smelters or forklifts or basic office necessities like desks and chairs or a printer. Either way, buying a bunch of equipment upfront can not only be costly, but infeasible. This is where equipment finance steps up to the plate by helping your business get the equipment you need, while avoiding bulky lump sum costs.

What exactly is equipment finance?

In simple terms, equipment finance is a type of business loan that specifically helps businesses get equipment. It differs from regular business loans in that most of the time equipment finance uses the equipment being bought as security against the loan.  

Equipment finance can be used to purchase a whole range of different types of equipment for businesses in different industries. That could be heavy equipment for industrial businesses, farm machinery for agricultural businesses, vehicles like cars and vans, or even equipment like computers and laptops for an office-based business.   

What should I look for in an equipment loan?

With any loan, whether it’s a business loan, personal loan or home loan, the main features you’ll likely already be thinking about are the interest rate and fees involved, but when it comes to comparing equipment finance loans you’ll want also want to consider a few other aspects of the loan:

  • Interest rate: When getting a loan for any purpose, trying to get the lowest interest rate possible is always a good place to start. While you need to watch out for particularly high fees, or restrictive conditions which you can’t fulfil, aiming for the lowest rate will generally result in paying less interest over the loan period.
  • Fees: Similarly to a low interest rate, finding a loan with minimal fees will likely lower your overall loan costs. Common fees to watch out for when comparing equipment finance loans include application fees, ongoing fees, late fees and settlement fees. It may also be worth comparing any early repayment fees attached to the loan if you’re planning to try and pay it off early.
  • Loan period: Getting an equipment loan for the right period is more important than many people may expect. On the one hand, taking out a loan over a short period of time may reduce the total interest you pay, but it could also hinder your business's cash flow or even result in additional fees if you’re unable to keep up with repayments. Conversely, a longer loan period may increase the total interest you pay.
  • Loan speed: Another feature to consider when comparing equipment finance business loans is the speed with which you’ll be able to access funding and the time you’ll need to spend in applying. These may not be factors important to every business, but if you’re in a rush to replace a piece of equipment your business relies upon they may be important. 

How long will it take to apply?

Whether it’s a bank lender or one of new up-and-coming lenders, the majority of equipment finance lenders have online applications that focus on getting you the equipment financing you need as quickly and easily as possible. This often means online application forms that can be completed in as little as 5-10 minutes and approval in just 24 hours. So in some cases it only takes filling out a short online form to get the funding you need the very next day.

To compare the application and funding speeds on offer from a number of online lenders, check out our equipment finance comparison table above. 

How much can I borrow with an equipment finance business loan? 

One of the major questions any business will have when it comes to comparing equipment finance loans is just how much they can borrow. The good news for borrowers is that lenders generally offer a wide range of funding options, from as little as a few thousand dollars all the way up to hundreds of thousands and even millions. 

For instance, many of the equipment finance loans in the table above offer loans ranging from around $5,000 to $500,000.

More equipment finance business loans FAQs

Am I eligible for an equipment loan?

Almost every lender will have its own set of requirements that borrowers will need to satisfy in order to get a business loan, but there are some standard ones including: Are you 18 years old? Do you have a business with an ABN or ACN? Are you an Australian resident? Do you have identification like a passport or driver's licence?

On top of this, every lender will have particular financial criteria your business will need to meet before they can offer you the loan you want. Common ones include a minimum turnover for your business, at least six months of operations and and a clean bill of financial health from the business owner or directors.

How old does my business need to be to get equipment finance?

As we mentioned above, many business lenders will avoid lending to a business that hasn’t been in operation for at least six months. While this is a general rule, it doesn’t mean that you won’t be able to take out an equipment finance loan if your business is in its infancy. A good place to start is our guide on business loans for startups which includes typical minimum trading requirements from a range of lenders, as well as alternative funding options. 

Do I need to provide security for an equipment loan?

No. For the most part, the equipment being bought with the loan acts as the security. That does mean that if you end up defaulting on the loan the lender may be able to take the equipment and sell it to make their money back though.

If you do have security, such as residential or business property or other equipment, you may be able to use as security against the loan in order to get a better rate. But usually equipment loans don’t need any additional collateral.

What equipment finance fees will I need to budget for?

Any loan is likely to come equipped with at least a few fees and while it’s clear what some of them are, others can be a bit more confusing, so here’s a brief rundown of some of the more typical equipment finance loan fees.

  • Upfront fees: Otherwise known as an application fee or an origination fee, an upfront fee is basically just a fee you pay when you start the loan which can either be a flat fee or a percentage of the loan. 
  • Ongoing fees: Ongoing fees are continuous fees that are paid weekly, fortnightly or annually. Much like upfront fees, these can either come as a percentage of the loan or as a flat rate.
  • Early repayment penalties: In some cases you may find yourself wanting to pay off your equipment loan early in order to save on interest. However, depending on the lender you choose, doing so may result in you paying extra costs and therefore reducing the savings made. 
  • Exit fees: If you completely pay off your loan earlier than expected, you may have to pay a fee. It’s often the case that the earlier you pay off your loan, the larger your fee will be.
  • Late payment fees: If you’re late to make a payment you’ll most likely pay a price. This may be in the form of one or multiple different fees, such as a direct debit dishonour fees.

How do I start comparing equipment finance?

Before jumping in and signing up for an equipment loan, it’s worth comparing a range of business loans offers first. To get started, check out the equipment finance offers in the handy comparison table above, or head over to the Mozo business loan comparison table or unsecured business loan comparison table for even more offers.

Also make sure you check out Mozo's ultimate business loan guide and our other business loans guides to learn more about comparing and applying for business loans.