Why Construction Businesses Use Asset Finance
Construction is one of the most capital-intensive industries in Australia. A single excavator can cost $150,000–$500,000, and most projects require multiple machines working simultaneously. Asset finance lets you:
- Preserve working capital for wages, materials, and sub-contractors
- Match repayments to project revenue with flexible term structures
- Scale your fleet as you win more contracts without large upfront costs
- Claim tax deductions on interest, depreciation, and potentially the full purchase price under the instant asset write-off
Construction Equipment We Finance
| Category | Typical Assets | Finance Range |
|---|---|---|
| Excavators | Mini excavators (1.5t–8t), midi (8t–20t), large (20t–80t+) | $30K–$800K |
| Loaders | Skid steers, wheel loaders, tracked loaders, backhoe loaders | $40K–$500K |
| Cranes | Mobile cranes, tower cranes, crawler cranes, franna cranes | $100K–$3M+ |
| Earthmoving | Bulldozers, graders, scrapers, compactors, rollers | $80K–$1.5M |
| Concrete | Concrete pumps, agitator trucks, batching plants, line pumps | $50K–$1M |
| Scaffolding | Scaffold systems, elevated work platforms, boom lifts, scissor lifts | $20K–$300K |
| Generators & Lighting | Diesel generators, light towers, compressors | $10K–$150K |
| Site Infrastructure | Site sheds, demountables, portable toilets | $10K–$100K |
Need to Finance Construction Equipment?
Get a free quote from a specialist broker who understands the construction industry.
Get a Free Quote →Finance Structures for Construction
| Feature | Chattel Mortgage | Finance Lease | Operating Lease / Rental |
|---|---|---|---|
| Ownership | You own from Day 1 | Financier owns; you buy at end | Financier owns; return at end |
| GST Credit | Full upfront | Claimed on each payment | Claimed on each payment |
| Depreciation | ✓ Yes | ✗ No | ✗ No |
| Instant Write-Off | ✓ Eligible | ✗ No | ✗ No |
| Payments Deductible | Interest only | 100% of payment | 100% of payment |
| Best For | Long-term ownership, tax benefits | GST-reg businesses wanting off-balance sheet | Project-based, short-term, or rapidly depreciating |
| Indicative Rate | 5.49% – 9.99% | 5.49% – 10.49% | By quote |
Many construction businesses use a mix of structures: chattel mortgage for core machinery they'll keep for years, and operating leases or rentals for project-specific or short-term needs.
Project-Based vs Permanent Fleet
Permanent Fleet Assets
If you'll use the equipment across multiple projects over 3–7+ years, buying via chattel mortgage is usually the most cost-effective. You claim depreciation, build equity, and can sell the asset when you're done.
Project-Based Assets
For equipment needed for a single project or 6–18 months, an operating lease or equipment rental avoids the hassle of resale. You return the asset when the project finishes. This is common for tower cranes, specialised concrete equipment, and temporary site infrastructure.
When to Use Each
- Excavator you'll use for 5+ years: Chattel mortgage — own it, depreciate it, claim the write-off
- Tower crane for a 12-month high-rise project: Operating lease or rental — return when done
- Fleet of skid steers across multiple sites: Finance lease — fixed payments, replace at end of term
- Generator for a 3-month civil job: Short-term rental — no finance commitment
Tax Benefits for Construction Equipment
- Instant Asset Write-Off: Eligible small businesses can immediately deduct the full cost of qualifying equipment. See current thresholds →
- Depreciation: Claim depreciation over the effective life — typically 7–15 years for heavy construction equipment (diminishing value or prime cost method)
- Interest Deductions: Under chattel mortgage, interest is 100% tax-deductible
- Lease Payments: Under finance or operating lease, 100% of each payment is deductible
- GST Recovery: GST-registered businesses recover the GST — upfront under chattel mortgage, or per payment under leases
Calculate Your Repayments
Enter the equipment price and term to estimate weekly or monthly repayments.
Open Calculator →Eligibility & Requirements
- ABN/ACN: Active ABN with GST registration (recommended)
- Time in business: 2+ years preferred; start-up options available with additional security
- Credit score: 500+ for most lenders; specialist lenders available for impaired credit
- Financials: Under $250K usually low-doc (BAS/bank statements). Over $250K may require full financials.
- Deposit: Not always required; 10–20% may improve rates for higher-risk applications
- Asset valuation: Used equipment over $150K may need an independent valuation or inspection
FAQs
Can I finance used construction equipment?▼
Yes. Most lenders finance used construction equipment up to 15–20 years old at the end of the loan term. A mechanical inspection or valuation may be required for older or high-value machinery.
What deposit do I need for construction equipment finance?▼
Many lenders offer 100% finance for established businesses with strong credit. Start-ups or higher-risk applications may require a 10–20% deposit. A trade-in can also serve as a deposit.
Is it better to lease or buy construction equipment?▼
It depends on duration of use. If you'll keep it 5+ years, buying (chattel mortgage) is usually more cost-effective — you build equity and claim depreciation. For project-based or short-term use (1–3 years), an operating lease or rental avoids the resale hassle.
What construction equipment can be financed?▼
Almost any revenue-producing construction asset: excavators, loaders, bulldozers, graders, cranes, concrete pumps, scaffolding, compactors, generators, site sheds, and vehicles like tip trucks and concrete agitators.