Small Business Asset Finance in Australia – How to Access and Find Lenders

Business asset financing in Australia plays an important role in accelerating the growth of many Australian SMEs. If your business encounters expensive equipment or land costs then asset finance can be a great solution. Read on to learn about small business asset based lending, or view our homepage for the best unsecured business loans. We’ll run through what business asset finance is, if startup business asset finance is possible and we’ll explain how to use our business asset loan calculator. 

Asset Finance: The base Figures

Loan TypeSecuritiesTermsAvg Loan SizeEstimated Interest Rate
Asset FinanceAsset1-7 years$100,0001.6%-15%

Business Asset Finance Lenders in Australia – Expedited Application 

Use the form below to find relevant asset finance offers - tailored to your requirements and business stats. Lender matching is done via Lend - a leading platform for all forms of Australian business financing. Lend boasts an entire, highly professional, department specifically for asset financing.

What is Asset Finance for Business?

An asset finance business loan (or simply business asset finance) is a type of business loan that is essential to many of Australia’s growing industries of today. Typically, with small business asset based lending, the asset you’re looking to purchase is used as security in the lending process. But even if you aren’t financing a new asset, you can still seek an asset finance business loan by using an existing company or personal asset to secure the asset funding.

A huge variety of assets can be financed, just a handful of examples would include:

  • Heavy Machinery
  • Farming Equipment
  • Company Vehicles
  • Mining Equipment
  • IT Equipment
  • Kitchen Fitout (also called a fit-out loan)

Basically, when it comes to asset finance, commercial construction finance or equipment loans, it’s generally only for assets that are seen as a significant investment in your business and will have a reasonable lifespan.

One of the key advantages of business asset finance is it allows businesses to spread the cost of the asset over its expected lifespan. If we take an entrepreneur looking to launch a manufacturing business for example, the upfront costs of the capital machinery could be well above the cash currently held in the bank. This is where business asset finance comes in. Even if a business has the capital to hand, they may not wish to lose such a large chunk by purchasing an asset outright. 

Prior to an Asset Business Loan – Deciding on Buying vs Leasing

When it comes to buying an asset through an asset business loan (secured business loans), it would be best to consider a popular alternative – leasing the asset, whether it’s a piece of real estate, or otherwise.

The clear advantages of renting or leasing is that there is no necessity for big payments and it’s easier to not go through with the obligation (i.e. each leasing contract has a mechanism for it to be cancelled, while defaulting on a loan has its own grim consequences). When there are no big payments to be made then there’s less interest to pay on the asset loan deal as well.

The clear disadvantages of leasing an asset is that the owner of the asset can decide to ramp up the costs, and that the usage of rented property is far more limited than with an ownership.

There are many different factors to weigh in on such a decision but it must be considered and research prior to taking an asset business loan in Australia.

Asset Finance Business Loan vs Standard Term Business Loan

You may not qualify specifically for asset finance if you’re looking to purchase low value or temporary assets (such as stock) but that’s not to say you can’t use the proceeds from a standard term business loan from one of Australia’s online lenders to fund the purchase of your asset.

Best for Asset Finance

These are the top 3 specialist lenders for asset financing.

#1 Finance One

  • From $8,000 to $125,000.
  • Loan term 3 to 7 years.
  • Approval in 48h.
  • Offices in Townsville and Brisbane
  • ProductReview.com.au 2020 Awards winner.
  • Optus Awards 2018 Finalist.
  • Focused on personal touch.
  • Min. requirements – generating income for the past 6 months, minimum 21 years of age, clean credit history.
  • Pending Review on smallbusinessloansaustralia

#2 Grow (grow.com.au)

  • Established in 2015, more than 7,000 customers and over $1bn funded.
  • Specifically focus on asset , equipment, invoice and trade finance (whereas most lenders are predominantly focused on unsecured loans).
  • Impressive management team with plenty of industry experience.
  • Specialising on vehicles, equipment, and floorplan finance.
  • Pending Review on smallbusinessloansaustralia

#3 EarlyPay

  • 4.8 /5 on TrustPilot with 150 positive reviews.
  • ASX traded company.
  • Impressive boards and executives.
  • Specifically focus on asset , equipment, invoice and trade finance (whereas most lenders are predominantly focused on unsecured loans). Also offers foreign exchange payments.
  • Fits both startup stage companies as well as larger corporations.
  • Borrow $20,000 to $1m with equipment loans.
  • Min rates on equipment loans – 7.5%.
  • 24h approval.
  • Assets EarlyPay finances:
    • Steel Engineering
    • Forestry Machinery
    • Packaging Equipment
    • Cleaning Equipment
    • Pharmaceutical Production
    • Compressors & Generators
    • Arborist & Landscaping
    • Food & Beverage Production
    • Drilling & Boring
    • Metalworking
    • Printing Equipment
    • Pallet Racking
    • Medical & Dentistry Equipment
    • Imaging & Testing Equipment
    • Demountable Modular Offices
    • Above ground Mining Equipment
  • Pending Review on smallbusinessloansaustralia

 

For comparison with a leading lender which is not necessarily focused on asset financing in Australia, just look at an unsecured or secured term loan with Prospa to learn more. A Prospa business loan can be used for virtually any business purpose, including buying business assets. As Australia’s no.1 online lending company, Prospa has cemented its place as the go-to online lender for excellent customer service and quick turnaround times.

New Business Asset Finance / Startup Business Asset Finance

In certain industries, such as construction and farming, there are likely to be assets which are vital to operating your business – without them you simply wouldn’t be able to function as a business or offer the same level of service as your competitors. Assets can be a vital investment to start your business but it can be hard to find the money to pay for them up front. This is particularly true for startups who may require new business asset finance.

Raising capital as a new business is not easy. On the whole, online lenders understand that and they generally have more favourable lending terms than banks – but being a startup will always present challenges when seeking finance. The most favourable terms a borrower will find for startup business asset finance is to have been operating for at least 6 months. This is the minimum requirement we’ve been able to find, with some online lenders asking for at least 12 months in operation and some banks 3+ years.

By agreeing to a small business asset based loan you will be securing your loan agreement with an existing or new asset that you are purchasing for your business, thus reducing the risk to the lender and in turn improving the chances of your business being approved for financing. For that reason you should be better off seeking startup business asset finance vs a standard unsecured term loan.

Small Business Asset Based Lending – The Pros and Cons

Asset finance can play a significant role in allowing small businesses to take the next step forward in their development. There are a heap of benefits to asset finance for business but there are a few points to consider as well: 

AdvantagesDisadvantages
  • Provides a solution to make purchases that normal cash flow simply wouldn’t cover.
  • Certain tax benefits possible on key asset purchases.
  • Huge variety of asset financing solutions covering; equipment, car fleets and property.
  • Should attract a lower rate/higher chance of approval than an unsecured business loan.
  • Repayments should be fixed and easy to budget for.
  • Varied terms – asset finance can be a mid to long term capital solution.
  • Can involve a deposit, your business may have to pay for 5-10% of the asset you’re wishing to buy upfront.
  • Assets can become outdated during your repayment period.
  • Can involve asset valuation costs.

Business Asset Finance Calculator

Use our business asset finance calculator for free and better understand the repayments you may face if you take out an asset finance business loan. Simply input the total value of the asset you wish to purchase, the deposit you will pay on your asset purchase, the expected repayment term and the likely interest you will incur.

Equipment Loan Calculator


Concluding Thoughts on Business Asset Funding

There are lots of business asset financing providers in Australia and (by lending standards) it’s a pretty accessible solution for most small businesses. Given the uncertain times, lenders are likely to prefer secured lending solutions over unsecured, so an asset finance business loan could be a great option right now. Try to be sure you’re buying an asset that will stand you in good stead throughout its lifetime and you can afford the repayments throughout this time too. Using our business asset finance calculator should help you budget at this stage.