Machinery is one of the biggest costs in agriculture — but it’s also one of the biggest drivers of productivity. Farm equipment loans help Australian farmers and agri-businesses fund essential gear such as tractors, harvesters, sprayers, and irrigation systems without tying up all their cash at once.
This guide explains how agricultural equipment loans work in Australia, what affects ag equipment loan rates, which finance structures are commonly used, and the practical steps that can improve approval outcomes.
Whether you’re upgrading existing equipment, expanding acreage, or investing in efficiency (like precision spraying or water management), the right facility can protect working capital while still getting the machinery on-farm when you need it.
Important note: lender policies vary and approval is never guaranteed. Always confirm tax treatment with your accountant, as different finance structures can have different outcomes.
What are farm equipment loans?
Farm equipment loans are a type of business asset finance used to purchase new or used agricultural machinery. In most cases, the equipment itself acts as security, which can make it more accessible than unsecured business lending.
You may also see these referred to as:
- ag equipment loans
- agriculture equipment loans
- agricultural equipment loans
- agriculture farm equipment loans
Common assets funded include:
- Tractors, loaders and attachments
- Headers, harvesters and balers
- Sprayers and spreaders
- Hay and silage equipment
- Grain handling and storage equipment
- Irrigation equipment loans (pumps, pivots and water systems)
Finance options: choose the structure that fits your farm
The best structure depends on whether you want ownership, how long you plan to keep the asset, and how seasonal your income is.
Chattel mortgage
Common when the business wants to own the machinery from day one. The lender takes security over the asset until the loan is repaid.
Hire purchase
You pay for the equipment over time and ownership transfers at the end of the agreement once all payments are complete.
Finance lease
The lender owns the asset and you lease it for a fixed term. End-of-term options may include paying a residual, extending, or upgrading (depending on the agreement).
Operating lease (rental-style)
Often used when the asset is needed for a defined period, or when the business prefers flexibility over ownership.
Seasonal repayments and residuals
Some lenders can tailor repayments around harvest timing or uneven income cycles. A residual (balloon) can also lower monthly payments, but it creates an end-of-term obligation, so you’ll want a clear plan (payout, refinance, trade-in or sale).
Ag equipment loan rates, deposits, and approvals
Ag equipment loan rates vary across lenders and are influenced by the borrower, the asset, and the structure. “Low interest farm equipment loans” typically reflect strong borrower profiles and well-supported assets rather than a single universal rate.
Lenders usually assess:
- Serviceability: ability to repay alongside existing debts and seasonal variability
- Credit profile: repayment conduct, existing liabilities and recent enquiries
- Asset age and resale value: newer machinery and strong brands can be easier to fund
- Deposit/LVR: older or specialised machinery may require a deposit
- Purpose: equipment that improves production or reduces cost is viewed more favourably
If you’re using an ag equipment loan calculator, remember calculators give indicative repayments only. A final quote depends on credit assessment, asset details, fees, and whether a residual is included.
Practical tips to improve your outcome
- Have a detailed quote (make/model/serial or VIN, hours, year, attachments and delivery date).
- Prepare recent bank statements or financials and a simple cash flow summary.
- If buying used equipment, have service history, photos, and seller details ready.
- Consider whether a deposit improves approval odds or pricing, especially for older assets.
- Don’t lodge multiple applications at once — it can create unnecessary credit noise.
FAQ
Are farm equipment loans available Australia-wide?
Yes. Many lenders offer agriculture equipment loan Australia-wide, but policy can vary by lender, asset type, and borrower profile.
Can I finance used farm equipment?
Often yes. Used equipment can be financed, although older assets may require a larger deposit or shorter term. Lenders may request hours, photos and maintenance history.
What affects ag equipment loan rates?
Rates depend on credit profile, deposit, term length, asset age, and resale value. Comparing total cost (including fees and any residual) is more reliable than comparing rate alone.
Can I get irrigation equipment loans?
Yes. Many lenders consider irrigation equipment loans for eligible pumps, pivots and water infrastructure, especially where the asset supports productivity and cash flow.
How fast can approvals happen?
Straightforward applications can be assessed quickly, sometimes within 24–72 hours. Complex purchases or older used assets can take longer due to valuation and verification.
Do farm equipment loans have tax benefits?
They can, depending on the structure and your circumstances. For example, interest and depreciation may be deductible for owned assets, and GST treatment can differ between structures. Confirm with your accountant.
Farm equipment finance is most effective when repayments match real farm cash flow and the asset genuinely improves productivity. With the right structure and lender, you can upgrade equipment while keeping working capital available for the season ahead.