Getting equipment finance can be challenging when your ABN is new, your trading history is short, or your financials don’t yet show a full year of consistent revenue. That’s why many lenders treat newer businesses differently to established operators — even if you’ve got strong skills, solid contracts, and clear demand.
This guide explains how equipment loans for startups work in Australia, what lenders usually look for when you’ve been trading under two years, and how to position your application to improve approval chances. You’ll also learn what deposits may be required, how serviceability is assessed, and the key costs (rates, fees, and potential balloon/residual payments) to budget for as a new business owner.
Important note: approval is never guaranteed. Lender policies vary, and what works for one startup may not work for another. The goal is to help you apply with the right structure and realistic expectations.
If you’re running a new business, time matters. A well-prepared application can reduce back-and-forth with lenders and help you secure the right asset sooner, whether you’re buying a work vehicle, machinery, tools, or tech.
Why new businesses get knocked back (and how to avoid it)
Most declines for startups aren’t because the business is “bad” — they’re usually because the lender can’t confidently verify capacity to repay. When you’re under two years ABN, the lender has less history to rely on, so they lean more heavily on recent evidence and risk controls.
Common friction points include:
- Limited trading history (for example, less than 12 months of bank statements)
- Thin or inconsistent cash flow, especially in seasonal industries
- Low deposit or no demonstrated savings buffer
- Higher-risk asset choice (older machinery, niche equipment, private sales)
- Credit file issues (late payments, defaults, ATO debt, or frequent enquiries)
Practical ways to strengthen your position:
- Show clear income evidence (business bank statements, invoices, contracts, BAS where available)
- Offer a deposit that matches the risk (more on this below)
- Choose an asset with strong resale value (many lenders price risk into older or specialised assets)
- Avoid multiple applications at once; each credit enquiry can affect outcomes
How lenders assess equipment finance under 2 years ABN
Even when a lender promotes “fast approvals”, they still assess three fundamentals: the borrower, the business, and the asset. For startup equipment loans, the assessment typically includes:
- Identity and credit history: credit score, repayment conduct, and existing liabilities
- Serviceability: whether your income can comfortably cover the new repayment alongside current commitments
- Income verification: often via business bank statements, BAS, invoices, contracts, or an accountant’s letter
- Deposit and equity contribution: a bigger deposit lowers the lender’s exposure (similar to a lower LVR concept)
- Asset details: age, condition, supplier, valuation, and whether it’s fit-for-purpose for your business
What “serviceability” can mean for a new business:
- Some lenders look at average monthly credits in your business account
- Others consider signed contracts and projected income (with conservative shading)
- Many assess your personal income as well, especially if the business is still ramping up
Tip: if your income is growing, a lender may still use an average across the available period — so supplying the most recent strong months (and explaining the uplift) can help your broker tell a credible story.
Deposits, rates, fees, and structures startups should understand
New business equipment finance is often priced according to risk. When your ABN is under two years, it’s common to see tighter terms than an established operator would get.
Key cost and structure points to know:
- Deposit: many startups need a deposit (often 10–30% depending on credit, asset, and industry). Some scenarios may be possible with lower deposits, but expect stricter assessment or higher pricing.
- Interest rate: usually higher for newer businesses. Rates vary widely by lender, asset type, term, and your risk profile.
- Fees: establishment fees and documentation fees can apply; always confirm the total cost, not just the rate.
- Loan term: commonly 1–5 years. Longer terms can reduce monthly repayments but may increase total interest paid.
- Balloon/residual: a residual can lower repayments but leaves a lump sum at the end. Make sure you have a plan for it.
- Security: the equipment itself is commonly used as security. Unsecured options can exist but often cost more.
Misconception to avoid: “low repayments” doesn’t automatically mean “more affordable”. A residual payment can make the monthly figure look attractive, but you need a realistic end-of-term strategy (refinance, pay out, or sell the asset).
Timeline expectations: if your documents are ready, some approvals can be quick. Delays usually come from missing info, unclear income evidence, or asset details (especially private sales or older machinery).
FAQ
Can I get equipment finance with a new ABN?
Yes, it’s often possible, even under 12 months, but the lender will usually want stronger supporting evidence. Expect requests for recent business bank statements, invoices, contracts, and sometimes an accountant’s letter. Your personal credit history and existing liabilities also matter, and the asset type (age and resale value) can influence approval.
What deposit do startups need for equipment loans?
Deposits vary, but startups commonly need around 10–30% depending on credit profile, industry risk, and the asset being purchased. A higher deposit can improve approval odds and may reduce pricing because it lowers lender risk. If you’re aiming for a low or no deposit deal, be prepared for stricter assessment and potentially higher rates or fees.
How do new businesses qualify for equipment finance?
Lenders generally assess serviceability (ability to repay), income verification, credit history, and the asset itself. New businesses can qualify by showing consistent cash flow through bank statements, supplying contracts or invoices, keeping existing debts manageable, and choosing equipment with strong resale value. A clear, well-documented application can reduce delays and improve outcomes.
Can I get equipment finance without tax returns as a startup?
Often, yes. Many lenders will accept alternative documents when tax returns aren’t available yet, such as business bank statements, BAS (if lodged), invoices, and signed contracts. Some may request an accountant’s declaration. You’ll still need to show the repayments are affordable, and lender policies differ on how much evidence is required.
What’s the difference between equipment loans for startups and established businesses?
The core product can be similar, but startups usually face tighter policies: higher deposit expectations, more conservative serviceability calculations, and sometimes higher rates. Established businesses typically have longer trading history and clearer financials, which reduces perceived risk for the lender and can improve terms.
Are startup equipment loans available for first-time borrowers?
Yes. First time equipment finance is common, especially for tradies and service businesses buying a first work vehicle or core machinery. The key is demonstrating reliable income, manageable existing debts, and a sensible asset choice. A deposit and clean documentation can make a big difference for first-time applicants.
Can a startup get a machinery loan for a used asset?
Yes, but used machinery can trigger extra checks. Lenders often look at the equipment’s age, condition, supplier type (dealer vs private), and resale value. Older or highly specialised equipment may require a larger deposit or attract higher pricing because the lender views it as harder to resell if something goes wrong.
Do lenders check my personal credit for new business equipment finance?
In most cases, yes. When a business is under two years ABN, lenders commonly rely more on the director’s personal credit history and liabilities. Even if the loan is in the business name, the director may need to provide a personal guarantee. Improving your credit file and limiting new enquiries can help.
How fast can equipment finance be approved for a new business?
Timeframes vary by lender and how complete your application is. If your identity checks, asset details, and income evidence are ready, decisions can be relatively quick. Delays usually come from missing documents, unclear income verification, or complications like private sales, older assets, or credit issues.
Choosing the right lender and structure matters most when your business is still building momentum. If you’re under two years ABN, focus on clear income evidence, a sensible deposit strategy, and an asset that supports your revenue — then get the application packaged properly so the lender can say yes with confidence.