Can You Finance Used Equipment?
Yes. Many Australian lenders finance quality used machinery and business equipment. Learn how equipment age, condition, operating hours and where you buy it can influence your finance options.
Buying used equipment can be a smart way for Australian businesses to increase capability without taking on the cost of brand-new machinery. Excavators, skid steers, forklifts, tractors, loaders and other commercial equipment can often provide years of productive service after their first owner has finished with them.
The good news is that many lenders are prepared to finance used business equipment. However, the available options can depend on more than the purchase price alone.
Equipment age, operating hours, condition, service history, seller type and expected remaining useful life can all influence how a lender assesses the purchase.
This guide explains how used equipment finance works, what lenders may look for and what you should consider before committing to a machine.
Quick Answer
Yes. Many Australian lenders finance used machinery and business equipment purchased through dealers and, in many cases, private sellers.
The available finance options depend on the business, the equipment and the individual lender's credit and asset policies.
Contents
- Can You Finance Used Equipment?
- Why Businesses Buy Used Equipment
- Does Equipment Age Matter?
- Do Operating Hours Matter?
- Why Equipment Condition Matters
- Service History and Maintenance
- Dealer vs Private Sale
- What Used Equipment Can Be Financed?
- What Lenders Assess
- Do You Need a Deposit?
- What Documents May Be Required?
- Should You Inspect Used Equipment?
- Ownership and PPSR Checks
- Tips Before Applying
- Final Thoughts
Can You Finance Used Equipment?
Absolutely.
Used equipment is financed by Australian businesses every day. In many cases, a second-hand machine can provide a cost-effective alternative to buying new while still delivering the capability the business requires.
The key difference is that lenders may need to consider the equipment's age and condition more closely because the asset has already experienced some of its working life.
Different lenders also have different appetites for used machinery. One lender may be comfortable with an older excavator or forklift, while another may prefer newer equipment.
Used Doesn't Automatically Mean Harder to Finance
Quality used machinery with reasonable operating hours, good service history and a strong resale market may remain attractive security for many lenders.
Why Businesses Buy Used Equipment
The most obvious advantage of used equipment is price, but that isn't the only reason businesses choose second-hand machinery.
Used equipment may allow a business to acquire a larger or higher-specification machine within the same overall budget.
Potential Advantages of Buying Used
- Lower purchase price.
- Potentially lower finance amount.
- Access to higher-specification equipment.
- Immediate availability.
- Potentially slower depreciation than brand-new equipment.
- Greater choice through dealer and private sale markets.
- Ability to purchase proven machinery with an established operating history.
- More flexibility when expanding a fleet.
Price Isn't Everything
A cheaper machine isn't necessarily better value. Consider expected servicing, repairs, downtime and remaining useful life alongside the purchase price.
Does Equipment Age Matter?
Yes. Equipment age can influence which lenders are willing to finance the purchase and how the loan may be structured.
However, there is no single age limit that applies across the entire lending market.
Different lenders may consider different maximum asset ages, either at the beginning of the finance term or at its completion.
May fit within a broader range of standard lender policies.
May still be financeable where condition, value and remaining useful life are acceptable.
May require a lender comfortable with that particular equipment category.
This variation is one reason it can be useful to compare lenders rather than assuming an older machine cannot be financed.
Do Operating Hours Matter?
They can.
For many types of machinery, operating hours provide an indication of how much work the equipment has completed.
But hours should never be viewed in isolation.
A machine with higher hours that has been consistently serviced and maintained may represent a stronger purchase than a lower-hour machine that has been neglected.
Provide useful context about the machine's working history.
Helps show whether maintenance has kept pace with equipment use.
Often provides the clearest indication of how the machine has actually been treated.
Why Equipment Condition Matters
Used machinery can lead a hard working life. Construction sites, farms, workshops, warehouses and civil projects can expose equipment to heavy loads, dust, vibration, moisture and difficult operating conditions.
Lenders may consider whether the equipment appears suitable security for the proposed finance term.
From the buyer's perspective, condition is even more important because poor equipment can create servicing costs and business downtime long after the finance has settled.
Condition Factors Worth Checking
- Engine condition.
- Hydraulic operation.
- Tyres or tracks.
- Structural cracks or repairs.
- Oil and hydraulic leaks.
- Electrical systems.
- Attachments.
- Safety equipment.
- Cab and controls.
- General signs of excessive wear.
Service History and Maintenance
A documented service history can provide valuable information about how the equipment has been maintained.
Look for workshop invoices, scheduled maintenance records, major component replacements and information about previous repairs.
Documentation Tells a Story
Two machines with identical operating hours can have very different histories. Maintenance records help you understand what happened during those hours.
Buying Used Equipment From a Dealer vs Private Seller
Used equipment can often be financed whether purchased from a dealer or a private seller.
Dealer transactions generally provide structured sales documentation, while private purchases may involve additional lender checks before settlement.
Usually provides a formal invoice, asset details and established settlement process.
May require additional seller identification, proof of ownership and asset verification.
Suitable options depend on lender policy rather than simply where the equipment is purchased.
What Types of Used Equipment Can Be Financed?
Finance may be available across a broad range of equipment categories, subject to individual lender policy.
Examples Include
- Excavators.
- Skid steers.
- Loaders.
- Forklifts.
- Tractors.
- Agricultural machinery.
- Scissor lifts.
- Access equipment.
- Generators.
- Compressors.
- Workshop equipment.
- Manufacturing machinery.
- Landscaping equipment.
- Other specialised commercial equipment.
Highly specialised equipment may have fewer potential lenders because its resale market can be more limited.
What Do Lenders Assess When Financing Used Equipment?
When assessing a used equipment finance application, lenders generally look at both the borrower and the equipment being purchased.
While every lender has different policies, most are looking for confidence that the equipment represents suitable security and that the business can comfortably meet the proposed repayments.
Business Profile
How long the business has been operating, its trading history and the applicant's experience may all influence lender choice.
Credit History
The applicant's credit profile and repayment history may affect both approval options and pricing.
Equipment Condition
The lender may consider the machine's condition, market value and expected remaining economic life.
Purpose of the Equipment
Lenders generally expect the equipment purchase to make commercial sense for the business.
Loan Amount
The amount being borrowed should be appropriate for both the equipment and the business.
Existing Commitments
Current loans and leases may also be considered when assessing affordability.
Do You Need a Deposit?
Not necessarily.
Some used equipment purchases may be financed without a deposit, while others may require or benefit from an upfront contribution depending on the lender, the equipment and the overall application.
A Deposit Isn't Always About Approval
Contributing a deposit may reduce the finance amount and repayments, but the most suitable approach depends on your individual circumstances.
What Documents May Be Required?
Documentation requirements vary between lenders and individual applications.
In addition to business information, lenders may request documents relating specifically to the equipment being purchased.
Common Documentation
- Purchase invoice or quote.
- Equipment description.
- Serial number.
- Seller details.
- Photographs of the equipment.
- Service history where available.
- Evidence of ownership.
- Business identification documents.
Should You Inspect Used Equipment Before Buying?
Absolutely.
Finance approval does not guarantee that a machine is mechanically sound or suitable for your intended use.
A thorough inspection remains one of the most important steps when purchasing second-hand machinery.
Don't Let Finance Replace Due Diligence
Inspecting the equipment, reviewing service records and confirming its operating condition remain the buyer's responsibility.
If you're unsure what to inspect, our Equipment Buyer's Inspection Checklist walks through many of the key areas worth reviewing before committing to a purchase.
Ownership and PPSR Checks
When purchasing used equipment, it's important to confirm ownership and identify whether any existing security interests may still be registered against the asset.
Many buyers choose to complete a Personal Property Securities Register (PPSR) search before settlement to help identify whether money may still be owed on the equipment.
A PPSR Search Can Be Valuable
A PPSR search is a relatively inexpensive step that may provide valuable information before purchasing used business equipment.
Tips Before Applying for Used Equipment Finance
Before You Submit an Application
- Choose equipment that suits your business.
- Inspect the machine thoroughly.
- Review service and maintenance records.
- Confirm ownership.
- Complete a PPSR search where appropriate.
- Obtain an accurate purchase invoice.
- Prepare your business information.
- Compare suitable lender options before committing.
Final Thoughts
Used equipment finance allows many Australian businesses to access quality machinery without paying the full purchase price upfront.
The best opportunities are often found where well-maintained equipment, realistic pricing and an appropriate finance structure come together.
By taking the time to inspect the machine, review its history and compare finance options, you can make a more informed purchasing decision and reduce the risk of costly surprises after settlement.
The Best Used Equipment Purchase Is an Informed One
Understanding both the equipment and the available finance options can help you purchase with greater confidence and choose machinery that supports your business for years to come.
Looking at Used Business Equipment?
Yes Approved can compare suitable finance options from a panel of more than 40 Australian lenders for quality used machinery and commercial equipment.
This guide provides general information only and does not constitute financial, taxation or credit advice. Finance availability, lender policies and eligibility criteria vary according to individual circumstances and may change over time.
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