Business and equipment loans

Start with what you are actually buying

Business finance is not one product. The lender who is comfortable funding a prime mover for an owner-driver is not necessarily the lender who wants to fund a dental practice fit-out or a warehouse purchase, and the questions each one asks are different. So the useful first step is not “what rate can I get” — it is working out which category you are in, because that determines who will look at the file and what they will want to see.

Broadly, business lending splits into three shapes. There is asset finance, where the thing you are buying secures the loan — a truck, an excavator, a forklift, a piece of plant. There is unsecured or general business lending, where the funds are for cash flow, stock, wages or a one-off cost and there is no single asset behind it. And there is commercial property lending, for buying the premises you trade from or an investment property held in the business. The seven pages below cover each of those.

What is different about borrowing as a business

This is the part worth reading slowly, because it is the part that genuinely differs from a personal loan and it is rarely spelled out.

Lending for business purposes generally sits outside the National Credit Code. The consumer protections that attach to a personal loan — the responsible lending assessment, the prescribed disclosure documents, the statutory hardship provisions — may not apply to a business facility. The loan is still governed by its contract and by the general law, and we are still a licensed credit business you can complain about and escalate. But do not assume the consumer safety net is underneath a business loan, because often it is not. Read the contract, and ask us about anything in it you do not follow.

Directors’ guarantees are normal, and they are a real personal obligation. If you borrow through a company or a trust, most lenders will ask the directors to personally guarantee the debt. There is nothing unusual or adversarial about that — it is close to standard, and being asked for one is not a sign anything is wrong. What matters is understanding what you are signing. A guarantee means that if the business cannot pay, the lender can come to you personally, from your own assets, including in some cases the family home if it has been offered as security. Sign one with your eyes open, and if you share those assets with someone, have the conversation with them first rather than after.

Structure, and why we send you to your accountant

Equipment can usually be financed in more than one way — a chattel mortgage, a finance lease, or a rental or operating lease. The repayments can look broadly similar. What differs is who owns the asset, how it appears on your balance sheet, how GST is handled, and what you can claim and when.

That is a tax and accounting question, and it is genuinely specific to your business — your entity type, your GST registration, your depreciation position, what else you have bought this year. Ask your own accountant which structure suits you. The Finance Team are credit brokers, not tax advisers. We will arrange whichever structure you and your accountant decide on, and we are happy to talk your accountant through what each lender offers, but we do not give tax advice and you should not treat anything on this page as tax advice.

What we will ask you for

It varies by lender and by how much you are borrowing, but expect the conversation to cover the business itself — what it does, how long it has been trading, the entity structure and ABN — along with the asset you are buying and where you are buying it from. Some applications are assessed on the strength of the asset and your history with similar debt; others go to full financials. Where a lender needs less paperwork, we will tell you, and where they need more, we will tell you that too rather than lodge something that is going to be knocked back.

Talking to us first costs nothing and does not put an enquiry on anyone’s credit file. We work out where the file fits before anything is formally lodged, which matters more in business lending than most people realise — a trail of declined applications makes each subsequent one harder.