Skip to main content
Loading the latest on mortgages, RBA & inflation…
Local Knowledge Finance
CPA and Registered Tax Agent · Credit Representative

What is asset lending?

Asset lending, or asset finance, is a loan or lease used to buy a vehicle, machinery or equipment, where the item itself secures the finance. Common types are chattel mortgages, finance leases and commercial hire purchase. It lets a business spread the cost over time instead of paying upfront from cash flow.

Get my lending options Business finance articles

Who it suits

  • Businesses buying vehicles, trucks, machinery, medical or technology equipment.
  • Sole traders and companies that want to keep working capital in the business.
  • Businesses replacing or upgrading equipment on a planned cycle.
  • Owners who want the tax and GST treatment of each option explained alongside the loan.

Documents lenders ask for

  • ABN details and how long the business has traded.
  • A quote or tax invoice for the asset, with the supplier’s details.
  • Recent business bank statements, and BAS or financial statements for larger amounts.
  • Identification for directors or owners, and details of existing finance.

Trade-offs and risks

  • The asset usually loses value over time, while the finance must still be repaid in full.
  • Some contracts have a balloon or residual payment at the end that needs planning for.
  • Breaking a contract early can involve break costs.
  • Directors are often asked for a personal guarantee.
  • GST, depreciation and deductions differ between a chattel mortgage, a lease and hire purchase. Ask your accountant which suits your business.

How we're paid

  • Lenders usually pay us a commission when a loan settles, and some also pay an ongoing trail commission while the loan stays open.
  • We tell you what we expect to receive, and from whom, in our credit quote and credit proposal before you apply.
  • If a fee from you applies to your situation, it is set out in writing before you go ahead. There is no obligation to proceed.
Read more

Related guides

Common questions

Asset lending FAQs

With a chattel mortgage, your business owns the asset from the start and the lender takes security over it. With a finance lease, the lender owns the asset and your business pays to use it, often with an option to buy it at the end.
Some lenders finance newer businesses, often with more documents or a deposit. Others want a longer trading history. We can check which lender policies match how long your ABN has been active.
Often, yes. Lenders have rules about the age and type of asset and who the seller is. Private sales may need extra checks.
A balloon or residual is a lump sum owed at the end of the contract. It lowers regular repayments but leaves a larger amount to pay, refinance or settle by selling the asset, so plan for it from the start.

General information only. It does not take your objectives, financial situation or needs into account and is not financial product, tax or legal advice. Lending criteria, fees and charges apply. Super, Centrelink and aged-care fee advice is referred to a licensed financial adviser. Ding Financial Pty Ltd t/a Local Knowledge Finance is a Corporate Authorised Credit Representative 517980 of Global Mutual Funds Pty Ltd (ACL 222640).

Talk to a broker about asset finance

Send us the asset quote and a little about your business. We will explain which finance types and lender policies may fit.

Get my lending options Contact us