Construction businesses are equipment-driven. Excavators, loaders, cranes, rollers and other “yellow iron” can win tenders, increase throughput, and reduce reliance on dry hire — but the upfront cost is significant.
Heavy equipment loans let Australian construction and earthmoving businesses buy the machinery they need now while spreading repayments over time. This article explains loan structures, approval factors, construction equipment loan rates, and how to get a loan for heavy equipment with fewer delays.
Important note: approvals are subject to credit assessment and lender policy. Always ensure repayments are affordable under realistic job and cash flow assumptions.
What can you finance with a heavy equipment loan?
Heavy equipment finance can cover a wide range of plant and machinery, including:
- Excavators, skid steers and loaders
- Dozers, graders and rollers
- Dump trucks and site trucks (where eligible)
- Cranes and material handling gear (crane equipment loans)
- Attachments (buckets, augers, breakers) as part of the package
Many businesses refer to this as earthmoving equipment loans or a construction equipment loan — the structure is generally similar, with the asset often used as security.
Finance structures used in construction
Chattel mortgage
You own the equipment from day one. Common for contractors who want full control and long-term use.
Hire purchase
You pay over time and own the asset at the end. Useful when ownership is the goal but you want structured repayments.
Finance lease / operating lease
Leasing can suit fleets that upgrade regularly or prefer flexibility. It can also be useful when you want to match payments to usage life.
Residuals and cash flow
A balloon/residual can lower monthly repayments, but it increases end-of-term obligations. In job-based industries, residuals should be set conservatively to avoid pressure when work slows.
Construction equipment loan rates and approval factors
Construction equipment loan rates vary based on:
- Your credit profile and trading history
- Contract pipeline and income consistency
- Deposit size and loan-to-value ratio
- Asset age, hours/kilometres and brand resale value
- Loan term and whether a residual is included
For used equipment or private sales, lenders may require additional verification, PPSR checks, or valuation. Well-documented assets generally move faster through credit.
Working capital and equipment-backed funding
Some businesses explore a heavy equipment working capital loan secured by existing assets to fund mobilisation costs, payroll, insurance, or materials while waiting on progress payments.
This can help manage timing gaps, but it also adds repayment load. It’s best used with a clear purpose and conservative cash flow buffer.
Practical approval checklist: how to get a loan for heavy equipment
- Provide a detailed quote with make/model, year, hours, serial/VIN and delivery timeline.
- Prepare recent bank statements and a summary of existing debts.
- Show evidence of work pipeline (contracts, purchase orders, tender wins).
- Confirm insurance is available for the asset.
- Avoid multiple lender applications at once.
FAQ
How do heavy equipment loans work in Australia?
They’re a form of asset finance where the machinery often acts as security. You repay the loan over a term while using the equipment to generate revenue.
Can I get earthmoving equipment loans for used machinery?
Yes, often. Older assets may require a deposit, shorter term, or valuation. Maintenance history and hours can materially affect approval.
What is a yellow iron equipment loan?
“Yellow iron” typically refers to heavy earthmoving and construction machinery like dozers, excavators, loaders and graders. Finance works similarly to other equipment loans, with lender focus on resale value and utilisation.
Do crane equipment loans have stricter requirements?
They can. Because cranes can be higher value and more specialised, lenders may require stronger documentation, valuation, and cash flow evidence.
How quickly can construction equipment loans be approved?
Simple applications can be assessed within 24–72 hours, but used assets, private sales, or specialised equipment can take longer due to verification and valuation steps.
What affects construction equipment loan rates?
Rates depend on credit profile, deposit, asset type/age, loan term, and lender policy. Total cost (fees and any residual) matters as much as the rate.
Heavy equipment finance is most effective when it supports contract delivery without overextending cash flow. A lender that understands construction utilisation, asset values, and job-based income can make approvals smoother and structures more practical.