Farm Equipment Finance Australia — Rates from 6.59%

Three main finance structures are available for farm equipment in Australia: chattel mortgage, hire purchase, and finance lease. The right choice depends on whether you want to own the asset, how you handle GST, and what suits your cash flow.

A chattel mortgage gives you ownership from day one. You claim the GST credit upfront on the purchase price, deduct interest, and depreciate the asset. It's the most popular structure for established farms buying high-value equipment like harvesters and tractors.

Hire purchase also leads to ownership, but at the end of the term. GST is claimed progressively on each payment. This can suit farms that prefer to spread the tax benefit across the life of the agreement.

A finance lease keeps the asset off your balance sheet and lease payments are fully deductible. It works well for equipment you plan to upgrade regularly or need temporarily — a seasonal sprayer, for example, or technology that evolves quickly.

Farm income doesn't arrive in equal monthly instalments, and your finance shouldn't assume it does. Several lenders on our panel offer seasonal repayment structures that align with agricultural cash flow cycles.

In practice, this means higher repayments after harvest or livestock sales (when cash is available) and reduced or interest-only payments during planting, growing, and off-peak months. The structure is agreed upfront as part of the loan terms.

This is particularly valuable for broadacre cropping operations where 60-70% of annual income can arrive within a 2-3 month harvest window. Livestock operations with quarterly or seasonal sale cycles also benefit. Your broker structures the repayment schedule around your farm's specific income pattern, not a generic monthly cycle.

Lenders assess seasonal applications by averaging income across 2-3 years of trading history. If a year was affected by drought, flood, or commodity price drops, some lenders will weight it differently or exclude it — provided you can show evidence.

Farm equipment finance offers several tax advantages that can reduce the effective cost of your purchase. The specifics depend on your finance structure and business circumstances — speak with your accountant for advice on your situation.

For GST-registered agribusinesses, a chattel mortgage lets you claim the full GST credit on the purchase price in your next BAS. On a $200,000 tractor, that's roughly $18,000 back within months of purchase — a meaningful cash flow benefit compared to claiming GST progressively under a lease.

Interest charges on farm equipment finance are deductible as a business expense regardless of the finance structure. Depreciation can be claimed on assets you own (chattel mortgage and hire purchase).

The $20,000 instant asset write-off has been extended to 30 June 2026 for businesses with aggregated turnover under $10 million. Assets under $20,000 that are installed and ready for use before that date can be deducted immediately. The threshold applies per asset, so multiple smaller items may each qualify.

For larger farm equipment, general depreciation rules and any applicable accelerated depreciation incentives may apply.

Note: Tax rules change. The information above is general only and based on publicly available ATO guidance as at April 2026.

Both new and used farm equipment can be financed, but the terms differ.

New equipment typically attracts the sharpest rates and longest available terms. Lenders are more comfortable with newer assets because residual values are predictable. You can often borrow up to 100% of the purchase price with no deposit required.

Used equipment is where the value often lies. A well-maintained 5-year-old tractor can cost 40-50% less than new while still having years of productive life ahead. Finance terms for used equipment are usually shorter (matching the remaining useful life) and rates may be 0.5-1.5% higher than new-equipment equivalents. Most lenders cap the age of used equipment at 10-15 years at the end of the loan term.

A deposit of 10-20% can help secure better rates on used equipment, particularly for older machinery or where the farm has a shorter trading history. That said, many applications for quality used equipment are approved with no deposit at all.

Applying starts with a short online form. You provide your business details, the equipment you're buying (or planning to buy), and your preferred loan amount and term.

From there, your application is matched against our panel of 50+ lenders. You receive multiple offers to compare — rates, terms, fees, and repayment structures — so you can choose the one that works for your operation.

Two pathways are available. Full-doc applications suit farms with complete financial records and typically attract the strongest rates. Low-doc options work for established farms (2+ years trading) where providing full financials is difficult — these rely on shorter bank statement periods and may require a property guarantee or 20% deposit.

The approval timeline depends on the complexity of your application. Straightforward deals with full documentation can settle within 24-48 hours. Larger facilities or more complex structures may take 3-5 business days.

Beyond the interest rate, several fees can affect the total cost of farm equipment finance. Understanding them upfront helps you compare offers accurately.

An establishment fee (sometimes called an origination fee) covers the lender's setup costs. This typically ranges from $200 to $995 depending on the lender and facility size. Some lenders waive this entirely for strong applications.

Documentation fees cover the legal and administrative costs of preparing your loan contract, ranging from $200 to $500 and usually charged once at settlement. A PPSR (Personal Property Securities Register) fee of $6-$10 covers registering the lender's security interest over the equipment.

Early payout fees apply if you repay the loan before the end of the term. These vary significantly between lenders — some charge nothing, while others charge a percentage of the remaining balance or a set number of months' interest. Always check before signing.