Here’s a Simple Guide to Equipment Financing in Australia

Small business owners may not necessarily have the means to acquire the equipment they need. For some, certain equipment may only be necessary for a certain period of time and may not be worth investing in to purchase equipment.

Luckily, there is the option of equipment financing. But what exactly is equipment financing, and how does it work?

What Is Equipment Financing?

Equipment financing is when equipment or a piece of machinery is used by a company through leasing or renting it. Depending on the agreement, the equipment at the end of the leasing or rental period may be owned by the small business or will be returned to the lessor company.

What Are the Types of Equipment Financing?

There are several types of equipment financing with different conditions. These types are listed below:

1. Hire Purchase

This type of equipment financing is basically an instalment contract for the equipment. The business gets the equipment after the agreement and makes regular payments to the lessor over a period of time. After the contract, the borrower will now own the piece of equipment.

2. Operating Lease

As the name suggests, this type is when the lender only leases the equipment to the borrower for the period that it is being operated. This means that at the end of the lease, the equipment still belongs to the lessor. Because the equipment belongs to them, any type of maintenance shall be handled by the lessor, unless the agreement says otherwise.

3. Financial Lease

Similar to hire purchase, this comes with a loan period. However, regardless of the loan period, there is only an offer to purchase. This means that the purchase is not guaranteed or necessary.

What Are the Benefits of Equipment Financing?

There are many benefits to equipment. The main benefits are outlined below:

1. Little Capital Needed

One of the biggest issues that many SMEs face is the lack of capital. Due to this, they often have trouble acquiring the equipment they need, which they may require to run operations. Luckily, with equipment financing, they do not need a big capital and can just slowly pay off their balance for the equipment. This makes it easier for them to get the equipment without having to shell out a huge amount of money.

2. Temporary Use

If the equipment or machinery will only be used for a short period of time as a certain season, purchasing the item may seem like too much. It could be too expensive to invest in something that has temporary use. Fortunately, equipment financing offers the opportunity to just borrow the equipment without having to pay for anything for it.

3. Convenience

Purchasing equipment can be a lot of trouble, especially if you aren’t sure yet what you need. Through equipment financing, you get a temporary replacement to use while you look into equipment replacement. You can even see for yourself if the equipment leased to you is something ideal and whether you should purchase it or something similar.


For SMEs, getting the equipment they need can be difficult as they do not have the proper resources. This is why equipment financing is very useful to them as not only does it help them get the equipment, but it gives them a more affordable option for equipment that is temporary.

If you are seeking equipment financing in Perth, you can contact us at FinanceCorp. Our team of mortgage professionals will be sure to get you what you need. All of the Finance Managers at FinanceCorp are fully qualified, trained and experienced mortgage professionals who live and breathe finance. Contact us to learn more.

All of the Finance Managers at FinanceCorp are fully qualified, trained and experienced mortgage professionals who live and breathe finance.