How Much You Can Borrow For Business Equipment In Australia

You can usually borrow 80–100% of the cost of new, standard business equipment in Australia, and around 60–90% for used gear, over 3–7 years, with the asset itself as primary security. Higher‑risk assets, older equipment or weaker cashflow will push those numbers down, and sometimes lenders want extra security such as a director guarantee or property.

In other words: your maximum equipment loan amount is mainly driven by (1) loan‑to‑value ratio (LVR), (2) term, and (3) what security you’re willing to offer.

Matching loan size and term to café equipment life keeps repayments manageable.

1. The three levers that cap how much you can borrow

1.1 LVR: what share of the equipment cost you can fund

Loan‑to‑value ratio (LVR) for equipment is the loan amount divided by the asset’s GST‑exclusive cost or valuation.

Indicative ranges many Australian lenders work within:

• New, standard vehicles & yellow goods: ~90–100% of cost
• New medical / dental / allied health equipment: often up to 100% for strong practices (src: /insights/finance-medical-dental-allied-health-equipment)
• New IT, POS, fit‑out: ~80–100%
• Used vehicles & machinery: ~60–90% (lower for older or specialised assets) (src: /insights/new-vs-used-equipment-what-lenders-will-and-wont-finance)
• Very specialised or soft assets (software‑only, websites): often capped, or require extra security

Low‑doc or no‑financials loans often come with tighter LVR caps and higher rates. If you’re considering those, read [/insights/low-doc-no-financials-equipment-loans-guide] for the trade‑offs before you commit.

1.2 Term: how long you can stretch repayments

Most stand‑alone equipment loans run 3–7 years. Lenders want terms to match the realistic working life of the asset (src: /insights/secured-vs-unsecured-equipment-loans-rates-risks-fit):

• Vans, utes, trucks: 4–7 years
• Yellow goods / machinery: 5–7 years
• IT & electronics: 3–4 years
• Fit‑out: usually no longer than the initial lease term (src: /insights/funding-cafe-retail-fit-out-finance-options-beyond-overdraft)

Longer terms reduce monthly repayments and can increase your practical “borrowing power”, but you risk paying for equipment after it stops earning.

1.3 Security: what backs the loan if things go wrong

For many small businesses, the equipment itself is enough security for standard loans (src: /insights/small-business-qualify-equipment-finance-eligibility-checklist).

Extra security might include:

• Director guarantees (very common)
• General security agreements over the business
• Property security over residential or commercial real estate

Property security can increase approval odds or maximum LVR, but it also concentrates risk on the family home (src: /insights/using-property-as-security-business-equipment-guide). We’ll come back to that.

2. Typical equipment finance LVRs, terms and what they mean

2.1 Snapshot comparison table

*For established, profitable practices and standard resaleable kit.

These are broad ranges only. Actual limits vary by lender, your financials, and whether you choose fixed or variable rates ([/insights/fixed-vs-variable-equipment-loans-decision-guide]).

2.2 How lenders size the loan in practice

Lenders usually look at two tests:

1. Asset coverage test – is the loan within their LVR limit for that kind of asset and age?
2. Repayment coverage test – does your cashflow clearly cover repayments with a safety margin?

The tighter test wins. A strong asset but thin cashflow can still cap your borrowing amount.