Starting a new business is challenging enough without the added frustration of being told you can’t finance the equipment you need to operate. If you’ve approached a bank and been knocked back because your business is too new, you’re not alone. Major banks are notoriously conservative with new business lending.
The good news is that the specialist equipment finance market in Australia is far more accommodating. Dozens of non-bank lenders specialise in financing equipment for newer businesses, understanding that every established business was once a start-up that needed its first piece of equipment.
At Mortgage & Finance Advisory, we regularly help new businesses across Geelong, the Surf Coast, Melbourne, and regional Victoria access equipment finance. Here’s what you need to know about getting approved.
Major banks typically require at least 2-3 years of financial statements, established revenue patterns, and a proven track record before approving equipment finance. This isn’t unreasonable from their perspective. They’re managing risk across millions of customers using standardised credit policies.
But this leaves a significant gap for new businesses that need equipment to generate the very revenue the banks want to see. It’s a circular problem: you need equipment to earn income, but you need income history to finance equipment.
Specialist equipment lenders fill this gap by taking a more nuanced approach to assessing new businesses, considering factors beyond just years of financial statements.
Your ABN registration date is the first thing lenders check. The thresholds that matter are:
| ABN Age | Options Available | Typical Requirements |
|---|---|---|
| Under 6 months | Very limited: specialist lenders only | 20-30% deposit, strong personal credit, industry experience |
| 6-12 months | Several specialist options | 10-20% deposit, 6 months bank statements, clean credit |
| 12-24 months | Good range of lenders | Low doc available, deposit negotiable |
| 24+ months | Full market access including no-doc | Standard criteria apply, much broader options |
A tradesperson with 15 years of experience starting their own plumbing business is viewed very differently from someone entering an industry they have no background in. Many lenders specifically ask about your industry experience and qualifications. Providing evidence of trade qualifications, licences, previous employment in the same field, and existing client contracts or letters of intent can significantly strengthen your application.
When your business doesn’t have a financial track record, lenders lean more heavily on your personal credit score. A clean personal credit file (no defaults, no judgments, consistent payment history) is particularly important for new business applications. If you have credit issues, it’s still possible to get approved, but expect to pay a higher rate and contribute a larger deposit.
A deposit demonstrates your commitment and reduces the lender’s risk. For new businesses, contributing 10-30% of the equipment value makes a significant difference to both approval chances and the interest rate offered. Some lenders may require a deposit where they wouldn’t for an established business.
Lenders feel more comfortable financing essential, income-generating equipment that holds its value well. A new excavator for a construction business or a work ute for a tradesperson is seen as lower risk than specialised or niche equipment with limited resale value. The equipment type directly affects both approval and pricing.
Low doc finance requires minimal paperwork: typically just your driver’s licence, ABN details, 6 months of business bank statements, and a quote for the equipment. It’s available for loans up to $500,000 for businesses with an ABN of 12+ months. Interest rates range from 7% to 11% p.a. depending on the amount and your profile.
For businesses with an ABN of 24+ months, no doc finance requires only proof of ABN, your driver’s licence, and the equipment quote. No bank statements, no tax returns. This is available up to $150,000 at rates from 8% to 12% p.a. While the rates are higher, the speed and simplicity make it ideal for time-sensitive equipment purchases.
Even new businesses can access chattel mortgages through specialist lenders. This gives you ownership from day one, GST credits upfront, and depreciation deductions. The key is working with a broker who knows which lenders accept newer businesses for chattel mortgage applications.
Register your ABN early. Even if you’re still in the planning stages, registering your ABN starts the clock. Lenders care about the ABN registration date, not when you started earning revenue.
Build your business bank account history. Open a dedicated business bank account as soon as you register your ABN and run all business transactions through it. Even 3-6 months of bank statements showing regular income helps enormously.
Save a deposit. Having 10-20% of the equipment cost saved demonstrates financial discipline and commitment. It also reduces the amount you need to borrow and improves your rate.
Get your quotes organised. Having detailed written quotes from equipment suppliers shows lenders you’re serious and have done your research. Include specifications, pricing, and delivery details.
Gather supporting documents. Trade qualifications and licences, evidence of existing contracts or clients, a simple business plan or cash flow projection, and proof of your industry experience can all strengthen your application.
Use a broker. This is arguably the most impactful step. A broker knows which lenders are currently approving new business applications, what documentation they need, and how to position your application for the best outcome. Submitting to the wrong lender wastes time and creates unnecessary credit enquiries.
Applying to multiple lenders directly: Each credit application creates an enquiry on your credit file. Multiple enquiries in a short period can signal desperation and reduce your score. A broker submits to one targeted lender, minimising credit impacts.
Choosing the wrong structure: A new business owner who isn’t GST-registered taking out a chattel mortgage misses out on the key tax advantage of that structure. Get advice on the right product for your specific situation.
Over-borrowing: It’s tempting to finance the best possible equipment, but starting with what you need rather than what you want keeps repayments manageable during the critical early months of business.
Ignoring total cost: A longer loan term means lower monthly repayments but more total interest. Make sure you understand the total cost of the finance, not just whether the monthly payment fits your budget.
When you have limited trading history, presenting your application in the best possible light becomes critical. Lenders want to see that you understand your market, have a clear plan for generating revenue, and can demonstrate the ability to service the finance. A comprehensive business plan is your strongest tool. It should outline your target market, competitive advantages, projected revenue and expenses, and specifically how the equipment you are financing will generate income. For example, a new landscaping business in Geelong should show projected job volumes, average job values, and how the financed equipment directly enables those jobs.
Beyond the business plan, your personal financial position plays a significant role in new business equipment finance applications. Lenders will assess your personal credit score, existing assets and liabilities, and savings history. A clean credit file with a score above 650, evidence of consistent savings, and personal assets that demonstrate financial responsibility can offset the lack of business trading history. If you own property (even a residential home with a mortgage), this can be offered as additional security to access better rates and higher approval amounts.
What Lenders Want to See From New Businesses
Essential documents: ABN registration (active for 3+ months), GST registration, business plan with financial projections, personal identification, last 3 months of personal bank statements, personal asset and liability statement.
Strengthening factors: Industry experience (even as an employee), relevant qualifications or licences, existing contracts or letters of intent from customers, a deposit of 10-20%, property ownership, and a co-borrower or guarantor with strong financials.
One of the biggest mistakes new business owners make is approaching their personal bank for equipment finance. Traditional banks typically require a minimum of two years’ trading history, two years of financial statements, and a strong business credit profile before they will consider an equipment finance application. This immediately disqualifies most start-ups and newly established businesses. However, the Australian lending market includes numerous non-bank lenders and specialist financiers who have built their entire business model around serving newer enterprises.
These specialist lenders assess applications differently. Some use a low-doc process that relies more heavily on the asset being financed and the applicant’s personal position rather than business financials. Others use technology-driven assessments that analyse your bank statement data in real-time to assess cash flow patterns. While rates from these lenders are typically 1-3% higher than major bank rates, they provide access to finance that would otherwise be completely unavailable. At Mortgage & Finance Advisory, we maintain relationships with over 60 lenders across Geelong and Melbourne, including several who specialise specifically in start-up and new business equipment finance.
Over-financing is one of the most common pitfalls we see with new business clients. It is tempting to finance the best, newest equipment available, but starting with more modest equipment and upgrading as your business grows is often the smarter strategy. A new excavation business does not necessarily need a brand-new $350,000 machine when a well-maintained 5-year-old unit at $150,000 will generate the same revenue in the early stages. Lower finance commitments mean lower monthly repayments, giving you more breathing room while you build your client base.
Another common mistake is not understanding the total cost of equipment ownership. Beyond the finance repayments, you need to budget for insurance (typically 1.5-3% of the asset value annually), maintenance and servicing, fuel or operating costs, storage, and transport between job sites. Registration and licensing costs apply to road-registered vehicles and certain equipment types. A new tradie on the Surf Coast financing a $80,000 truck might budget $1,800 per month for the loan repayment but forget that insurance ($2,400/year), registration ($800/year), servicing ($3,000/year), and fuel ($6,000/year) add another $1,017 per month to the true cost of ownership.
Client Example: Smart Start-Up Equipment Strategy
A newly qualified electrician in Geelong wanted to start his own business and needed a fully fitted service vehicle. Rather than financing a brand-new $95,000 van with a full fit-out, we suggested a two-stage approach: finance a quality used van for $42,000 with basic fit-out ($12,000) as stage one. Once he had 12 months of trading history and steady cash flow, we refinanced into a comprehensive package including the upgraded vehicle and premium tool storage system. The staged approach meant his initial repayments were just $1,180/month instead of $2,050/month, critical breathing room during his first year of trading.
The Instant Asset Write-Off is particularly valuable for new businesses because it allows you to deduct the full cost of eligible business assets in the financial year of purchase. For a new business that may have limited revenue in its first year, this deduction can significantly reduce your tax liability or even create a tax loss that can be carried forward to offset future profits. However, you need to be registered for GST and have an active ABN to claim the deduction, and the asset must be used primarily for business purposes.
Timing your equipment purchase strategically around the end of the financial year can maximise the tax benefit. Purchasing and having the equipment installed ready for use before 30 June allows you to claim the full write-off in that financial year, even if the equipment is financed and you have only made one or two repayments. We work with accountants across Geelong and Melbourne to ensure our new business clients time their equipment acquisitions for maximum tax advantage while still meeting their operational needs.
It’s very difficult with zero trading history. Most specialist lenders require at least 6 months of ABN registration. If you’re pre-start-up, consider registering your ABN now, saving a deposit, and applying once you have at least 6 months of registration and some bank statement activity.
Almost certainly yes for a new business. Lenders require directors or business owners to personally guarantee equipment finance obligations. This means you’re personally liable if the business can’t make repayments.
Yes, if you have existing equipment to trade in, many lenders and suppliers will accept the trade-in value as part or all of your deposit contribution. This is particularly common for vehicle and truck finance.
Typically up to $150,000 with minimal documentation. With a deposit and strong application (industry experience, clean credit, some bank statement history), amounts up to $250,000 or more are possible through the right lender. Very new businesses (under 6 months) are generally limited to under $100,000.
A bank decline doesn’t mean you can’t get equipment finance. Banks have the most conservative criteria. Specialist non-bank lenders approve many applications that banks decline. The key is to understand why the bank said no and address that issue (or work around it) when approaching a specialist lender through a broker.
We specialise in helping new businesses access equipment finance when banks say no. Tell us what you need and we’ll find a way to make it happen.
Call 03 9020 2699
Melanie has helped dozens of new businesses get the equipment finance they need to launch and grow, working with specialist lenders who understand the start-up journey.
Our experienced brokers compare options across 60+ lenders to find the right solution for your situation.
Director & Senior Finance Broker
With years of experience in mortgage broking and finance, Melanie helps clients across Geelong, the Surf Coast, Melbourne and regional Victoria navigate the complexities of home loans and business finance. Contact our team on 03 9020 2699.
