Heavy Machinery Loans in Australia: How Lenders Assess Excavators, Dozers, Cranes, and Mobile Plant

If you are looking at heavy machinery loans to fund an excavator, loader, dozer, grader, crane, telehandler, or other mobile plant, the decision is rarely just about the monthly repayment. In today’s Australian lending market, lenders typically look at the full picture, your trading strength, the machine’s resale profile, your documentation quality, and how the proposed structure behaves if work slows or downtime hits.

Heavy machinery finance can feel straightforward when you are staring at a dealer quote, but the assessment behind the scenes is usually more detailed than many business owners expect. Policies, documentation requirements, and risk appetite can all differ between lenders, and can shift without notice. That is why understanding how lenders commonly assess heavy machinery applications can save you time, reduce surprises, and help you choose a structure that fits your business reality.

In this guide, we explain how heavy machinery loans typically work in Australia, what lenders commonly assess, what changes between new and used plant, and the practical risks that matter most for contractors and plant operators. 

The information below is general in nature and is not personal advice. Eligibility and outcomes can vary between lenders and are subject to credit assessment.

What Lenders Usually Mean by “Heavy Machinery”

In Australian asset finance, “heavy machinery” usually refers to higher-value mobile plant and specialised equipment used in construction, civil works, demolition, earthmoving, mining services, rural contracting, and materials handling.

Examples often include:

• Excavators, mini excavators, and track loaders
• Wheel loaders, skid steers, backhoes, and compact track loaders
• Dozers, graders, rollers, and other civil plant
• Mobile cranes and certain lifting equipment
• Telehandlers, forklifts, and heavier materials-handling plant
• Attachments and inclusions, such as buckets, augers, breakers, GPS machine control, and quick hitches, depending on how clearly they appear on the invoice and whether the lender considers them “financeable” as part of the asset package

For lenders, heavy machinery differs from general business equipment because:

• Values are often higher, so the lender’s downside risk is larger if they ever need to recover and sell the asset
• The asset’s condition and remaining life can be harder to confirm, particularly for used machinery
• Resale markets can be model-specific and location-specific, and can tighten quickly during slower construction cycles
• Utilisation and downtime can materially affect cash flow, even for profitable businesses
  

This is why many lenders treat heavy machinery applications as a “plant” category with its own policy overlays, rather than a simple equipment loan.

How Heavy Machinery Loans Commonly Work in Australia

Most heavy machinery finance is structured as asset finance, where the lender takes security over the machinery being financed. In practical terms, that usually means the lender registers a security interest over the asset on the Personal Property Securities Register (PPSR).

A PPSR registration matters because it usually means:

• The machinery generally cannot be sold without paying out the finance first, because the lender has a recorded security interest
• If there is a default, the lender may have legal rights to enforce their security and recover the asset, subject to the finance contract and the law
• For buyers of used machinery, it highlights why PPSR checks are important, so you can see whether a security interest is already registered against the equipment you are buying
  

Heavy machinery finance is often faster than property lending, but that does not mean the assessment is light. The lender still needs to be satisfied that the facility is serviceable and the asset is acceptable security.

Common Finance Structures Used for Heavy Machinery

The structure you choose changes more than just the repayment amount. It can affect ownership, GST handling, end-of-term options, and how the facility behaves if you upgrade your fleet.

The most common structures in the Australian market include chattel mortgage, finance lease, operating-style lease arrangements, and hire purchase. Availability and features can vary between lenders.

Chattel Mortgage for Heavy Machinery

A chattel mortgage is a common structure for GST-registered businesses buying machinery they want to own. Under a chattel mortgage, the business usually takes ownership of the asset at settlement, and the lender takes a mortgage (security) over the asset.

In practice, lenders often like chattel mortgages for mainstream plant categories because ownership is clear, the asset is identifiable, and the security position can be registered on PPSR.

GST treatment and tax outcomes depend on your business circumstances and accounting method. For GST rules around hire purchase and leasing arrangements, the ATO is the right reference point, and your accountant can confirm how it applies to your entity and the way the machinery is used.

Finance Lease and Operating-Style Lease Arrangements

With a finance lease, the lender typically retains ownership during the lease term, and you make lease payments for use of the equipment. End-of-term options often include paying a residual, refinancing, upgrading, or other pathways, depending on the contract and lender policy.

Lease-style structures can suit businesses that prefer upgrade flexibility or want to align the asset life with replacement cycles. However, end-of-term outcomes still need planning because residuals and refinance options are not automatic. They are usually subject to contract terms and, if refinancing is involved, a fresh credit assessment.

GST handling for leasing and hire purchase arrangements has specific rules, and the ATO’s guidance is the most reliable starting point.

Hire Purchase

Under hire purchase, the asset is effectively acquired through instalment payments, and ownership typically transfers after the final instalment is paid. For GST purposes, the ATO treats hire purchase arrangements in a specific way, and it is worth confirming the GST implications with your accountant before you sign, especially where cash flow timing matters.

Hire purchase is still used in parts of the market, although many lenders and borrowers favour chattel mortgages for certain equipment categories. Which options are available can vary by lender and borrower profile.

Balloon or Residual Payments and Why They Matter More With Heavy Machinery

Many heavy machinery loans can be structured with a balloon (also called a residual). A balloon usually reduces regular repayments and leaves a larger lump sum due at the end of the term.

Balloon structures are not automatically “good” or “bad”. The key question is whether the end payment fits your business plan and the asset’s likely value at that time.

With heavy machinery, lenders often pay close attention to balloon sizing because:

• Machinery values can move quickly based on hours, maintenance, and the construction cycle
• A large balloon can increase the risk of negative equity, where the payout figure is higher than what the machine can realistically sell for
• Some equipment categories have less liquid resale markets, so lenders may restrict balloons or require more deposit depending on the asset type and risk grade
  

Some lenders may be more conservative on older or higher-hour machinery, or on specialised plant that is harder to resell.

New vs Used Heavy Machinery Finance: What Usually Changes

One of the biggest gaps we see in real applications is the assumption that used machinery is assessed the same way as new. Often it is not.

Financing New Machinery

New machinery purchases usually have:

• Cleaner documentation, including a dealer invoice with full asset details
• Clear serial numbers and build specifications
• Less condition risk at settlement
• More predictable valuation support for mainstream brands and models
  

New equipment can still have complexity if delivery is delayed or the machine is built to order. Some lenders may only settle once the equipment is ready for delivery, while others may allow staged payments depending on policy and supplier arrangements. This is lender-specific.

Financing Used Machinery

Used machinery introduces extra risk layers, so lenders often increase checks. Common lender focus areas include:

• Proof of ownership and a clear chain of sale
• Existing encumbrances, including current PPSR registrations
• Hours, service history, rebuild history, and condition reports
• Whether the asset is standard and easily valued or highly specialised
  

If you are buying used machinery, it is usually sensible to understand the PPSR process and search the asset where possible before paying deposits or finalising sale terms. PPSR is the official register for security interests in personal property, and Service NSW also points buyers to PPSR checks for personal property security interests.

Some lenders may require a valuation or independent inspection for used machinery, particularly where the asset is older, higher-hour, imported, or not commonly traded.

Auction Purchases

Auction buying can be workable, but it creates timing pressure. Auction settlement timelines may be short. If your lender needs additional checks, valuations, or condition reports, it can be difficult to line everything up inside auction terms.

If you buy at auction, the practical question is whether you can align:

• The lender’s approval timeline and conditions
• The auction’s payment deadlines
• The evidence required to identify the asset and confirm its condition
  

Different lenders handle auction purchases differently, so broker strategy often becomes about selecting a lender whose process matches your purchase pathway, not just the headline rate.

Private Sale Purchases

Private sale purchases often require extra diligence because documentation may be less consistent than a dealer transaction. Lenders may want clear invoices and identification details. They may also be more cautious where the asset’s history is unclear.

What Lenders Commonly Assess For Heavy Machinery Loans

Although every lender has their own credit policy, most assessments land around a few core themes. This is where finance brokers in Sydney make a difference, because two lenders can look at the same file and interpret risk differently.

Your Business Structure and Borrowing Entity

Lenders usually consider whether you are applying as:

• Sole trader
• Partnership
• Company
• Trust
  

The structure can affect documentation requirements, security approach, and whether personal guarantees are requested. It is common for lenders to look at director or guarantor positions even when the borrower is a company.

Trading History and Industry Profile

Many lenders prefer to see a stable trading history, but the required length can vary. Some lenders may consider shorter trading histories if there is strong supporting evidence, such as consistent bank statements, clear industry experience, and a conservative structure.

In heavy machinery, lenders often pay close attention to industry volatility. Civil, earthworks, and subcontracting can be strong industries, but they can also be exposed to:

• Payment delays due to progress claims
• Weather impacts
• Customer concentration risk, where one builder or head contractor makes up most of the  revenue
• Project-based income that can be lumpy month-to-month
  

This does not mean heavy machinery finance is “hard”. It means the application needs to be clear and well supported.

Serviceability and Cash Flow, Not Just Turnover

Most lenders care less about turnover in isolation and more about whether the business can meet repayments comfortably.

Depending on the lender and documentation type, they may review:

• Business bank statements
• BAS
• Profit and loss statements
• Tax returns
• Existing liabilities and repayment commitments
  

What lenders often test, especially for machinery borrowers, is whether repayments remain manageable if the month is below average. In heavy machinery businesses, that could be because of downtime, delayed payments, or a gap between projects.

Credit History and Existing Commitments

Even for business lending, lenders often review the personal credit history of directors or guarantors. Existing debts can influence serviceability and risk grading.

This is also where machinery loans can intersect with property lending. Some lenders include business loan repayments and certain guarantees when assessing personal borrowing capacity for a home loan. Treatment varies by lender and by how income and liabilities are structured.

The Machinery Itself: Asset Acceptability and Resale Strength

For heavy machinery, lenders often focus heavily on the asset because it is usually the primary security.

Common asset-related considerations include:

• Brand, model, and whether there is a well-established resale market
• Age and projected age at the end of the  term
• Hours and conditions, including maintenance records where relevant
• Whether the asset is standard plant or specialised equipment
• Whether the asset is imported and how easily it can be identified and valued locally
  

Some lenders apply maximum age limits at the end of the loan term for certain asset types. This is common in transport and machinery finance, but the exact limits vary and can change.

Deposits and “Skin in the Game” for Heavy Machinery Loans

Deposit expectations vary widely. Some lenders offer high-LVR outcomes for strong profiles and mainstream assets. Others may require deposits where risk factors stack up.

In our experience, lenders are more likely to expect a deposit when:

• The asset is used, older, or higher-hour
• The plant is specialised or has a weaker resale market
• The borrower has a limited trading history
• The industry is perceived as having higher volatility at the time
• The documentation is light, such as low-doc assessment pathways
  

Deposits reduce lender risk. They can also reduce your repayment load and may open up a wider lender panel, depending on the scenario. That said, “no deposit” outcomes can exist in the market, but they are not universal and are usually profile-dependent.

Interest Rates, Fees, and the Real Total Cost of Machinery Finance

It is normal to focus on the interest rate. But in heavy machinery finance, the total cost can be driven by multiple moving parts.

Why Pricing Varies So Much

Equipment and machinery finance pricing is often risk-based. Lenders may price differently based on:

• The asset type and resale strength
• New vs used status
• Term length
• Deposit contribution
• Borrower and guarantor credit profile
• Documentation type, such as full-doc vs alternative doc
• Industry appetite at the time
  

Two lenders can produce very different outcomes on the same file because they weight risk factors differently.

Fees That Can Materially Change the Cost

Common fees may include:

• Establishment or origination fees
• PPSR registration fees
• Valuation or inspection fees, more common for used and specialised machinery
• Ongoing account-keeping or processing fees, depending on the lender
• Early payout fees or break costs for certain fixed-rate arrangements, depending on contract terms
  

These are not always “bad”. They are simply costs that need to be understood upfront so you can compare like-for-like.

Lower Repayments Can Mean a Larger End-of-Term Decision

Balloon structures can make repayments feel easier in the short term. But they increase the importance of end-of-term planning.

If the plan is to refinance the balloon, remember refinance is not automatic. It is usually a new assessment, and lender policies and market appetite can change.

If the plan is to sell the machine to clear the balloon, the practical risk is that the machine’s sale value may not match the payout figure, particularly if hours are high or the market softens.

Insurance, Asset Protection, and Why Lenders Care

Many lenders require evidence that the machinery is insured from settlement, particularly for higher-value plant. The exact insurance requirements vary by lender and asset type.

For lenders, insurance reduces the risk that a major loss event wipes out the security while the debt remains.

It is also worth remembering that PPSR relates to security interests in personal property, not land or buildings. PPSR is the national register for security interests over personal property.

GST and Tax Treatment: Practical Timing Matters More Than Theory

Most business owners know that taxes can influence the net cost of equipment, but the biggest issue we see in the real world is not the deduction. It is timing.

GST Timing Can Affect Working Capital

GST handling differs depending on the structure and your GST reporting method. For example, the ATO explains GST treatment for hire purchase and leasing arrangements, and those rules can affect when GST is payable and when credits may be claimed.

In practical terms, if GST is payable upfront under a particular structure, your business might need to carry that cash until the next BAS cycle. That can matter if you are also funding mobilisation costs, wages, fuel, and repairs.

Depreciation and Deductions Are Accounting Outcomes, Not Lender Promises

Interest and depreciation may be deductible when the machinery is used for income-producing purposes, but deductibility depends on how the asset is used and the structure of your entity. These are accounting questions, and your accountant is best placed to confirm them.

A lender’s role is to assess repayment capacity and security strength. They will not “approve” a deal because of a tax deduction. They will approve it because serviceability and risk make sense under their policy at the time.

Downtime Risk Is a Credit Issue, Not Just an Operational Issue

Heavy machinery businesses can be profitable and still feel cash flow stress if downtime hits at the wrong time.

Downtime can come from:

• Repairs and parts delays
• Wet weather and site shutdowns
• Operator availability
• Safety stand-downs or access restrictions
• Unexpected maintenance events
  

For lenders, downtime matters because it can reduce revenue while repayments remain fixed. That is why lenders often care about:

• Hours and service history for used equipment
• Warranty coverage for new purchases
• Whether the business has a buffer or a stable income pattern that can absorb variability
  

This is also why some lenders are cautious when the proposed repayment is “tight” even if the deal looks workable on paper.

A Practical Step-by-Step Path from Quote to Settlement

Heavy machinery finance often moves smoothly when the application package is clean. Delays usually come from missing asset details or mismatched lender selection.

Step 1: Make sure the quote is finance-ready

A finance-ready quote usually includes:

• Full equipment description, make, model, year
• Serial number and identifying details, where available
• Hours for used machinery
• List of inclusions and attachments
• Purchase price and GST treatment
• Delivery timing, especially for build-to-order machinery
  

Step 2: Choose a structure that matches the asset and your cash flow pattern

This is where we usually look at:

• Term length aligned to the asset’s realistic working life
• Balloon settings that do not create a forced refinance problem
• Whether the lender’s policy suits new vs used, auction vs dealer, and the asset category
  

Step 3: Provide the documentation that matches the lender’s assessment method

Some lenders assess with full financials. Others assess with alternative documentation, such as bank statements and BAS, depending on policy and risk grade.

What the lender asks for can vary, but common items include:

• ID and entity details
• Business bank statements
• BAS and/or financials
• Existing liabilities and commitments
• Asset quote and supplier invoice
• Evidence of deposit, where required
• Insurance evidence, where required
  

Step 4: Meet conditions and settle

Once approved, the lender issues documents and settles, commonly paying the supplier directly and registering their security on PPSR.

Heavy Machinery Loans for Newer ABNs, Contractors, and Subcontractors

Newer businesses are not automatically excluded from machinery finance, but lender scrutiny often increases when trading history is short.

Some lenders may look for:

• Consistent business bank statement income patterns
• Clear industry experience and continuity of work
• Conservative structures, such as lower amounts, shorter terms, or well-known machinery with reliable resale demand
• Deposits to reduce exposure
  

Low-doc or alternative documentation pathways can exist, but they often involve trade-offs such as tighter policy settings, higher pricing, or conservative security requirements. Whether that applies depends on the lender and the overall risk profile.

How Heavy Machinery Loans Can Affect Future Home Loan Borrowing

This is a common question, especially for owner-operators who are also planning a home purchase or refinance.

In many cases, home loan lenders assess your broader financial position, including business debts and sometimes guarantees, depending on how your income is structured and how the liabilities are documented. Treatment varies by lender.

The practical point is that machinery finance can change your borrowing picture, even if the business debt is not in your personal name. If buying a home is on your near-term horizon, it can be worth factoring that in early so you are not surprised later.

Choosing a Lender Path: Bank vs Specialist Machinery Financiers

Heavy machinery finance is offered by major banks, regional banks, and specialist asset finance lenders.

In general terms:

• Some banks may offer sharper pricing for strong, low-risk profiles, but can apply stricter policy filters
• Specialist lenders may consider a wider mix of scenarios, including certain used assets or shorter trading histories, but pricing and fees may differ
• Turnaround times and documentation expectations can vary widely across the market
  

None of these pathways is automatically “better”. The goal is to match policy to your scenario and keep the structure aligned with how your business actually operates.

When you are comparing finance providers, it is also sensible to confirm licensing and legitimacy. ASIC and MoneySmart provide guidance on checking whether providers are appropriately licensed.

How We Approach Heavy Machinery Finance as Brokers in Sydney

When we help clients with heavy machinery loans, the value is rarely in filling out forms. It is in selecting a lender and structure that fits the machine, the purchase pathway, and the way cash actually moves through your business.

Our process usually involves:

• Clarifying what you are buying, how you are buying it, and when it needs to settle
• Identifying lender policy fit for the asset type, new vs used status, and purchase method
• Stress-testing the structure so the repayments and any balloon align with your quieter months, BAS cycles, and likely replacement timeline
• Packaging the application with the right documents upfront, because heavy machinery approvals often slow down when basic asset details are missing or unclear
• Explaining the trade-offs clearly, including end-of-term decisions and payout mechanics, so you can make an informed call
  

We also stay lender-neutral because policies vary, and the “right” lender in one month can change if policy appetite shifts.

If you are in Sydney and researching asset finance alongside property plans, it can help to consider the whole picture early, including how business liabilities may be interpreted in future home loan serviceability, depending on the lender.

Moving Forward with Heavy Machinery Finance

Heavy machinery finance can be a practical way to fund mobile plant without tying up all your working capital upfront, but the details matter. The machine you choose, the way you buy it, the structure, and the lender’s current policy settings can all change the outcome.

If you would like to see what heavy machinery finance options may be available for your situation, our team at Unconditional Finance can help you compare lender policies, explain common structures clearly, and guide you through the next steps.

Disclaimer: This information is general in nature and does not take into account your objectives, financial situation, or needs. Lending criteria, rates, fees, and product features vary between lenders and may change without notice. All applications are subject to credit assessment and approval by the relevant lender. You should seek independent legal, financial, and tax advice before entering into any finance arrangement.

Frequently Asked Questions (FAQs)

1. Can I finance heavy machinery bought at auction?

2. Do lenders finance attachments like buckets, GPS, or breakers?

3. Do I need a PPSR check when buying used machinery?

4. Will lenders require an inspection for used machinery?

5. How do balloon payments work for excavators and dozers?

6. Do lenders require insurance before settlement?

7. Can I refinance heavy machinery finance mid-term?

8. Can machinery finance affect my home loan application later?