Home › Blog › Equipment Finance for Manufacturers

Equipment Finance for Manufacturers

Finance structures that maximise tax benefits for CNC machines, lathes, presses, and production equipment.

Manufacturing Equipment Finance Overview

Australian manufacturers regularly finance equipment ranging from $20,000 CNC routers to $2M+ automated production lines. The right finance structure can deliver significant tax savings while preserving cash flow for operations.

Equipment TypeTypical Range
CNC machines (routers, mills, lathes)$20,000–$500,000
Hydraulic presses & stamping machines$50,000–$400,000
Welding & fabrication equipment$10,000–$150,000
Packaging & bottling lines$100,000–$1M+
Industrial ovens & furnaces$50,000–$300,000
Automated production lines$500,000–$5M+

Best Structure for Manufacturers

Chattel Mortgage — Most Popular

For most manufacturers, a chattel mortgage delivers the best tax outcome:

  • Instant asset write-off — potentially deduct the full equipment cost in Year 1 (if eligible)
  • Upfront GST credit — claim the full GST on purchase price in your next BAS
  • Interest deductions — deduct the interest component of every repayment
  • Ownership — modify, upgrade, or relocate the equipment as needed

Finance Lease — For Regular Upgrades

If you upgrade equipment every 3–5 years to stay competitive, a finance lease offers lower monthly payments and simple end-of-term options (return, upgrade, or purchase).

Tax Benefits for Manufacturers

Worked Example — CNC Machine

Purchase: $220,000 (inc. GST) CNC milling machine via chattel mortgage
GST credit: $20,000 claimed in next BAS
If instant write-off eligible: $200,000 deduction in Year 1 → $50,000 tax saving (at 25% rate)
Interest over 5 years at 7%: ~$36,000 deductible
Total potential tax benefit: $86,000+

This is a simplified example for illustration only. Actual tax outcomes depend on your specific situation, eligibility, and current ATO rules. Consult your accountant.

Tips for Manufacturers

  1. Time your purchase — settle before 30 June to claim deductions in the current financial year
  2. Bundle installation costs — delivery, installation, and commissioning costs can often be included in the finance amount
  3. Consider Total Cost of Ownership — maintenance contracts, consumables, and training can be factored into the finance package
  4. Get multiple quotes — use a broker who works with multiple lenders to compare offers
  5. Plan for expansion — if you'll be adding more equipment within 12 months, discuss a facility or line of credit rather than individual loans

Frequently Asked Questions

Yes. Many Australian manufacturers import CNC machines and production equipment from Germany, Japan, Italy, and China. Lenders can finance imported equipment — some will even pay the supplier directly in foreign currency. Shipping and import duties can be included in the finance amount.

Software that is integral to the equipment (e.g., CNC control software) is typically included in the finance package. Standalone software licences may need to be financed separately or treated as an operating expense.

Yes. Most lenders finance refurbished and used manufacturing equipment. They may require a valuation or inspection for higher-value items. Rates may be slightly higher than new equipment.

Estimate Equipment Finance Repayments

Enter your equipment value and compare finance structures — free, instant.

Open Calculator →