Starting a business is exciting — but funding your first major equipment purchase can feel like the hardest step. Whether you’re launching a trade business, farming operation, manufacturing workshop, or service company, securing a machinery loan for new business use often requires a different approach than established companies.
This guide explains how to get a machinery loan as a startup in Australia, what lenders look for, how approval works with a new ABN, and practical steps to improve your chances. If you’re wondering how to get loan for machinery without years of financial history, you’re not alone — and there are structured ways to make it happen.
Traditional banks may hesitate when a business has no trading history. However, specialist lenders, structured deposits, and broker-guided applications can open doors that first-time borrowers don’t always realise exist.
Why startups struggle with machinery finance
The biggest challenge with a machinery loan for startup businesses is risk assessment. Lenders typically rely on:
- Trading history (often 12–24 months)
- Business financial statements
- Cash flow consistency
- Director credit history
New businesses don’t always have these. That doesn’t mean approval is impossible — it just means the structure and lender choice matter more.
Unlike US-style SBA loan for machinery programs, Australia relies more heavily on commercial lenders, non-bank financiers, and asset-backed structures.
Step-by-step: how to get machinery loan approval as a startup
If you’re asking how to apply for machinery loan funding, follow these structured steps:
1. Understand your financial position
Before applying, calculate:
- Expected income and operating costs
- Cash flow forecast for at least 6–12 months
- Maximum affordable monthly repayment
- Available deposit (if any)
The Australian Government provides a helpful overview of preparing to apply for finance at Apply for a business loan (opens in a new tab), including documentation and planning tips.
2. Prepare a clear business plan
Lenders want to see that your machinery purchase supports revenue generation. Your plan should outline:
- What the machinery will be used for
- Expected contracts or pipeline work
- Target market and pricing model
- Projected turnover
A well-structured plan can significantly improve agriculture, construction, or trade-based machinery loan approval outcomes.
3. Choose the right loan structure
Startups typically use:
- Chattel mortgage – You own the asset from day one; the machinery secures the loan.
- Hire purchase – Ownership transfers after final payment.
- Finance lease – Lower upfront cost, with potential purchase option later.
- Low-doc equipment loan – For businesses under 2 years ABN.
If you’re entering agriculture, you may also want to review broader lending structures in this comprehensive guide to farm and agricultural machinery loans to understand how rural lenders assess risk.
4. Consider the “12-month strategy”
Some new operators use a two-stage approach:
- Finance initially with a specialist or second-tier lender.
- After 12 months of clean repayments and trading history, refinance with a lower-rate lender.
This approach can build credit history and reduce long-term cost, provided the refinance strategy is realistic.
5. Prepare documentation properly
You may need:
- Identification
- ABN/ACN registration
- Business plan
- Bank statements
- Quotes or invoices for machinery
- Personal asset and liability statement
Incomplete applications are one of the biggest causes of delays for machinery loan for msme and startup borrowers.
Deposit, rates, and credit considerations
Because new businesses carry higher risk, lenders may require:
- A deposit (often 10–30%)
- Stronger personal credit history
- Shorter loan terms
- Higher interest rates initially
Machinery loan for msme businesses and sole traders often rely heavily on the director’s personal credit profile. Clean credit and manageable existing debt significantly improve approval odds.
Interest rates vary based on:
- Asset type and resale strength
- Loan-to-value ratio (LVR)
- Trading history
- Industry risk
While rates may be higher in year one, structured refinancing later can reduce long-term cost.
Practical startup tips that improve approval
- Register your ABN as early as possible — longevity matters.
- Secure written contracts or letters of intent from clients.
- Offer a deposit if feasible.
- Choose machinery with strong resale value.
- Avoid multiple credit applications at once.
- Work with a broker who understands startup policy differences.
The goal is to demonstrate that the machinery directly generates income and that repayments are sustainable — not optimistic.
FAQ
Can I get a machinery loan for a new business in Australia?
Yes, but approval depends on your personal credit, deposit size, business plan, and the asset being financed. Specialist lenders often assist startups under 2 years ABN.
How do I get machinery loan approval without financial history?
You’ll typically need a strong business plan, clean personal credit, and sometimes a deposit. Lenders may also request contracts or projected income evidence.
What deposit is required for a machinery loan for startup?
Deposits commonly range from 10–30%, depending on lender policy and asset type. Some low-doc options may allow lower deposits but often involve higher rates.
Can I get a machinery loan with a new ABN?
Yes. Many lenders consider businesses under 12–24 months ABN, especially if the director has industry experience and strong credit history.
Is there an SBA-style loan for machinery in Australia?
Australia does not have direct SBA machinery loans like the US. Instead, finance is typically provided by banks, non-bank lenders, and asset finance specialists.
How long does machinery loan approval take?
Simple applications can be approved within 24–72 hours. More complex or startup applications may take longer depending on documentation.
Can I refinance my machinery loan later?
Yes. Many startups refinance after 12–24 months of clean trading history to secure lower rates or improved terms.
Does a machinery loan affect my personal credit?
Often yes. Directors commonly provide personal guarantees, meaning repayment conduct can impact personal credit files.
Getting your first machinery loan is often the turning point between planning and operating. With the right preparation, structured application, and lender strategy, even brand-new businesses can secure funding that supports sustainable growth rather than creating unnecessary financial pressure.