Trades Equipment Finance: What Sparkies, Plumbers and Chippies Need to Know

You need a new ute. The old one's done 280,000 clicks, the air con's gone, and last week the tray dropped a rivet on a job site. You know what you want. You just need to work out how to pay for it.

Most tradespeople in Australia run as sole traders or in small partnerships. You finance utes, trailers, tool packages, and the occasional piece of specialist equipment. It's not complicated finance, but it has a few traps that can cost you money or get your application knocked back before it even reaches a lender.

A new dual-cab ute sits between $50,000 and $75,000 depending on the model and spec. A box trailer runs $3,000 to $8,000. A fully kitted tool package can hit $15,000 to $25,000. These are bread-and-butter assets for finance brokers, and most lenders have straightforward products for them. The question is whether your application is set up to get the best terms.

The structure most tradies use

A chattel mortgage is the most common finance structure for tradespeople. You take ownership of the asset from day one, the lender holds a mortgage over it as security, and you make fixed monthly repayments over 3 to 7 years.

If you're GST-registered, you claim the full GST credit on the purchase price upfront. On a $65,000 ute, that's roughly $5,900 back in your next BAS. You also claim depreciation and interest as tax deductions over the loan term.

For most tradies buying a ute or equipment they'll keep for several years, chattel mortgage is the simplest and most tax-efficient option.

Two things that trip up tradies (and how to fix them before you apply)

1. Get your GST registration sorted

If your business turns over more than $75,000 a year, you're required to register for GST. But plenty of tradies delay it, especially early on, and that creates problems when you apply for finance.

GST registration affects three things at once: your eligibility for certain commercial finance products, the interest rate you're offered, and how lenders assess your turnover. A lender looking at a sole trader doing $90,000 a year who isn't GST-registered sees a compliance red flag, not just a paperwork gap. It suggests the business isn't set up properly, and that affects their risk assessment.

If you're anywhere near the threshold, register before you apply. It takes 10 minutes through the ATO portal and it removes a question mark from your application.

2. Separate your business and personal bank accounts

This is the one that catches people. As a sole trader, there's no legal requirement to have a separate business account. So plenty of tradies run everything through one transaction account: job payments in, mortgage out, Friday night out, weekend at the TAB, all in the same feed.

When a lender asks for three months of bank statements, they see everything. And if your statements show gambling transactions, frequent entertainment spending, or irregular patterns mixed in with business income, it changes how they assess your application. It's not about judgement. It's about risk modelling. Lenders look at disposable income and spending behaviour, and when business and personal transactions are tangled together, it's harder for them to see a clean picture of your business.

Open a separate business account before you apply. Most banks offer free or low-cost transaction accounts for sole traders. Route all your job income and business expenses through it. Give it two to three months of clean history. When the lender asks for business bank statements, they see what they need to see: revenue in, costs out, clean and simple.

What else lenders look at

Beyond GST and bank statements, lenders typically want to see:

• ABN age: Most lenders want at least 12 months of trading history. Some will consider 6 months with strong financials.
• Income evidence: BAS statements (if GST-registered) or tax returns. Low-doc options exist for tradies who can't provide full financials, but expect to pay a higher rate.
• Asset type and age: New utes and equipment are straightforward. Used assets over 10 to 15 years old can attract higher rates or shorter terms.
• Credit history: Defaults or late payments on personal credit will affect a business application when you're a sole trader, because you and the business are the same legal entity.

What to do next

Before you walk into a dealership or start shopping for equipment, do three things. Check your GST registration status and sort it if you need to. Open a dedicated business bank account if you don't have one, and give it at least two to three months of clean transaction history before applying. Pull together your last two BAS statements or your most recent tax return so you've got income evidence ready.

Then talk to a finance broker rather than going straight to the dealer. Dealer finance is convenient, but a broker compares options across a wider panel and can usually find a better rate or structure for your situation.

If you're looking at your next ute, trailer, or tool package, Emu Money can compare finance options across 50+ lenders and find the right structure for your setup. Compare equipment finance options.

Subject to lender approval, terms, and conditions apply.