Plain-English definitions of the finance terms Australians run into when they borrow, lease, invest or run a business. Each entry starts with a one-sentence definition, then the detail that matters.
Finance has its own vocabulary, and most of it is only confusing because nobody has explained it plainly. This glossary covers the terms you will meet in loan documents, lease contracts, tax rules and lender conversations: from balloon payments and chattel mortgages to residual values, serviceability and stamp duty.
Every entry follows the same shape. A short definition you can read in ten seconds, the key points, how the concept works in Australia, and the questions people most often ask. Related terms are linked so you can follow a thread from one idea to the next.
Search for a term, browse by topic, or jump to a letter below.
The main ways businesses and individuals finance vehicles, equipment and other assets.
9 termsInterest, rates, margins and the other numbers that decide what borrowing costs.
24 termsHow repayments are structured over the life of a loan or lease, and what happens at the end.
20 termsHow assets lose value over time and how that is treated for tax and accounting.
19 termsWhat lenders take as security, how it is registered, and what happens when things go wrong.
35 termsHow lenders assess borrowers, and the scores, ratios and bureaus they rely on.
30 termsGST, deductions and the accounting rules that shape how finance shows up in the books.
18 termsThe regulators, laws and obligations that govern lending in Australia.
39 termsHow a business is set up, and what that means for borrowing.
13 termsFinance structures built for particular situations, industries or cashflow needs.
25 termsThe vocabulary of leases and hire agreements: parties, terms, options and end-of-lease choices.
34 termsThe main types of loans and credit available to Australian businesses and consumers.
28 termsHow visa status and residency affect who can borrow, how much, and on what terms.
12 termsHow finance is sold: brokers, aggregators, dealers, commissions and the paperwork in between.
21 termsWhat happens when repayments are missed, from hardship arrangements to insolvency.
14 termsInsurance types and terms that come up when you finance a car, home or business.
6 termsSuper contributions, funds and the rules around accessing retirement savings.
3 termsTax thresholds, offsets, returns and the government payments that affect household budgets.
4 termsEveryday banking terms: accounts, statements, guarantees and transfers.
4 termsShares, dividends, franking and the basics of investment returns.
5 termsProperty ownership, titles and the terms that come up when buying or holding real estate.
5 termsPay, packaging and employment terms that affect what you can borrow.
1 termsThe ACCC is the Australian Competition and Consumer Commission, the national regulator that enforces competition and consumer law, covering misleading conduct, cartels, product safety and unfair contract terms.
Read definitionAccelerated depreciation is any depreciation method that front-loads deductions, so a business claims more of an asset's cost in the early years of its life and less later.
Read definitionAn acceleration clause is a term in a loan contract that lets the lender demand the whole outstanding balance immediately if the borrower breaches the agreement.
Read definitionAdministration is a formal insolvency procedure where an independent administrator takes temporary control of a company to rescue it or get creditors a better result than immediate liquidation.
Read definitionAffordability is whether a person or household can meet the cost of a good, service or loan repayment without giving up essentials or taking on debt they cannot sustain.
Read definitionAn agent is a person or business authorised to act on behalf of another party, the principal, in transactions and negotiations within an agreed scope of authority.
Read definitionAn aggregator is the organisation that sits between finance brokers and lenders, giving its broker network access to a lender panel, technology, compliance support and commission processing.
Read definitionAlternative finance is any business finance sourced outside traditional bank lending, such as marketplace lenders, crowdfunding platforms, invoice financiers and other specialist non-bank lenders.
Read definitionAmortisation is the process of spreading a cost over time: repaying a loan in scheduled instalments of interest and principal, or expensing an intangible asset over its useful life.
Read definitionAn amortisation schedule is a table showing every repayment on a loan, splitting each one into interest and principal so you can see the balance fall.
Read definitionThe annualised percentage rate (APR) is the annual interest rate a credit provider must disclose on regulated consumer credit under the National Credit Code, excluding fees.
Read definitionAnti-money laundering (AML) is the set of laws, controls and processes designed to stop criminals turning the proceeds of crime into apparently legitimate funds, enforced in Australia by AUSTRAC.
Read definitionAn appraisal is a professional estimate of an asset's value at a set date, which lenders and lessors use to set loan-to-value ratios, price leases and assess collateral risk.
Read definitionAPRA is the Australian Prudential Regulation Authority, the statutory regulator responsible for prudential regulation of banks, credit unions, insurers and superannuation funds, protecting depositors, policyholders and fund members.
Read definitionArrears are overdue repayments on a loan or credit account: the borrower has missed instalments, which the lender tracks by days past due and which can lead to a default.
Read definitionArtificial intelligence (AI) is technology that lets computer systems learn from data, recognise patterns and make decisions that would traditionally require human judgement, including credit decisions in lending.
Read definitionASIC is the Australian Securities and Investments Commission, the regulator for companies, markets, financial services and consumer credit, which licenses providers, keeps public registers and enforces conduct laws.
Read definitionAn asset is anything a business or person owns or controls that is expected to produce future economic benefit, such as cash, equipment, vehicles, property or receivables.
Read definitionAsset disposal is the sale, trade-in, scrapping or retirement of a business asset, which takes it off the asset register and triggers accounting and tax adjustments.
Read definitionAsset finance is the umbrella term for business finance that pays for vehicles, equipment and other income-producing assets, with the asset itself acting as the security.
Read definitionAn asset register is a structured record of the tangible and intangible assets a business owns, controls or leases, tracking each item's location, value, depreciation and disposal in one place.
Read definitionAsset-based finance (ABF) is business finance secured on a company's assets, with the facility size set by the value of the receivables, inventory, equipment or property pledged.
Read definitionAn assignment of contract is the transfer of one party's rights under a contract, such as the right to be paid, to a third party, without transferring the assignor's obligations.
Read definitionThe ATO is the Australian Taxation Office, the national tax authority that collects income tax, GST and PAYG, administers superannuation rules, issues rulings and enforces compliance.
Read definitionAUSTRAC is Australia's financial intelligence unit and anti-money laundering regulator: it collects reports from regulated businesses, analyses them and supervises reporting entities under the AML/CTF Act.
Read definitionAn Australian credit licence (ACL) is the authorisation from ASIC that a business needs to provide consumer credit or credit assistance under the National Consumer Credit Protection Act.
Read definitionBad credit finance is a broad category of lending products designed for borrowers whose credit history shows defaults, court judgments or bankruptcy, problems that make mainstream lenders hesitant.
Read definitionA bad debt is an amount owed to your business, usually an unpaid invoice already counted as income, that you cannot recover despite reasonable efforts and so write off.
Read definitionA balance sheet is a financial statement that shows a business's financial position at a specific date: what it owns (assets), what it owes (liabilities) and the owners' equity.
Read definitionA balloon payment is a lump sum, agreed upfront, that is paid at the end of a loan term and lowers the regular repayments by deferring part of the principal.
Read definitionA balloon refinance is a new loan taken out to pay the balloon payment owed at the end of a car or equipment finance term.
Read definitionA bank guarantee is a written promise from a bank to pay a set amount to a third party if its customer does not meet an obligation.
Read definitionA bank statement is a record from your bank listing every deposit, withdrawal and fee on an account, with the running balance for the period.
Read definitionBankruptcy is a legal status for an individual who cannot pay their debts, under which a trustee takes control of their affairs and deals with creditors on their behalf.
Read definitionA base rate is the reference interest rate a lender starts from, before it adds the margin, or spread, that reflects the borrower and the term.
Read definitionA basis point (bps) is a unit equal to one hundredth of a percentage point, used to express small changes in interest rates, yields, fees and spreads.
Read definitionA beneficial owner is the natural person who ultimately owns or controls a company, trust or other entity, even when legal title sits in another name.
Read definitionBeneficial ownership is the right to enjoy the benefits of an asset or company, such as income or sale proceeds, even when someone else is the legal owner.
Read definitionThe best interests duty is a statutory obligation requiring financial advisers giving personal advice and mortgage brokers arranging credit to put the customer's interests first.
Read definitionA bill of sale is a written record that documents the transfer of ownership of personal property, such as a vehicle, boat or equipment, from a seller to a buyer.
Read definitionBlock discounting is receivables finance where a lender finances a whole portfolio, or block, of hire-purchase or instalment contracts in one facility rather than individual invoices.
Read definitionBreak costs are the charges a lender passes on when a fixed rate loan is repaid or changed before the fixed term ends.
Read definitionA break option is a lease clause that lets the lessee, the lessor or both end a lease early, provided they give the required notice and meet its conditions.
Read definitionA bridging loan is short-term finance secured by a mortgage over property, covering the gap when you buy a new property before the sale of your existing one settles.
Read definitionA broker is a licensed intermediary who connects borrowers with lenders, comparing finance options across a panel of lenders and submitting applications on the borrower's behalf.
Read definitionA business loan is finance for business operations, capital expenditure or growth, repaid with interest, either over an agreed term or as a revolving limit you draw and repay.
Read definitionBusiness risk is the chance that an event or condition stops a business meeting its objectives, from profitability and growth to regulatory compliance and continuity.
Read definitionBuy now, pay later (BNPL) is regulated consumer credit where a provider pays the merchant up front and you repay in set instalments, usually interest-free if paid on time.
Read definitionA buy-back is a contractual arrangement in asset finance where the seller, or another party, agrees to repurchase an asset at a future date or under agreed conditions.
Read definitionA cap rate is either a ceiling written into a variable interest rate, or, in property, short for capitalisation rate: net operating income divided by value.
Read definitionCapital allowances are the tax deductions you can claim for the decline in value of depreciating assets, such as plant and equipment, that you hold to produce assessable income.
Read definitionCapital expenditure (CapEx) is money a business spends to buy or improve fixed assets such as buildings, plant and vehicles, rather than on day-to-day running costs.
Read definitionCapital gains tax (CGT) is the income tax you pay on the net profit from selling or disposing of an asset, added to your income rather than charged separately.
Read definitionA captive lessor is a finance company owned or sponsored by a manufacturer, distributor or dealer network that exists mainly to provide leasing and finance supporting the vendor's sales.
Read definitionA car loan is a credit contract used to buy a vehicle: the lender provides the funds and you repay them over time with interest.
Read definitionCash flow is the movement of money into and out of a business over a period; unlike profit, it tracks actual receipts and payments, so it measures liquidity.
Read definitionThe cash rate is the interest rate the RBA targets for overnight loans between banks, the benchmark that anchors short-term funding costs and influences most Australian lending rates.
Read definitionA cashflow loan is short-term business finance assessed on your recent trading cashflow and receivables rather than pledged assets, covering payroll, supplier bills or stock before customer payments arrive.
Read definitionA caveat is a notice lodged on a property title that warns others of a claimed interest and blocks most dealings until it is resolved.
Read definitionA chattel mortgage is a business loan for a vehicle or equipment: you own the asset from settlement and the lender holds a security interest until it is repaid.
Read definitionClawbacks are contract clauses that let a lender or aggregator recover commission already paid to a broker when a loan is repaid, refinanced or discharged within a set period.
Read definitionCollateral is the property a borrower pledges to a lender as security for a loan, which the lender can sell if the borrower defaults.
Read definitionCollateral risk is the chance that an asset pledged as security fails to cover the exposure because it falls in value, cannot be sold quickly or cannot be enforced.
Read definitionCollections is the recovery process a lender, creditor or business runs when payments fall overdue: reminders, calls, payment plans and hardship offers, then referral to agencies or legal action.
Read definitionA commercial loan is credit provided to a company, trust or other business structure to fund business activities such as property, equipment or working capital, not personal spending.
Read definitionCommissions are payments a lender or product issuer makes to a broker, adviser or referrer for arranging or servicing a financial product, paid upfront, as ongoing trail or both.
Read definitionA commitment letter is a document from a lender confirming it will provide a specified amount of finance on stated terms, subject to listed conditions being met before drawdown.
Read definitionA company is a separate legal entity, formed under the Corporations Act 2001, that can own property, borrow and be sued in its own name, independently of its shareholders.
Read definitionA comparison rate is a single annual percentage that combines a loan's interest rate with most upfront and ongoing fees to show its ongoing cost more clearly.
Read definitionCompliance is the work a business does to meet the laws, licence conditions and industry rules that apply to it, and to prove it has.
Read definitionCompound interest is interest calculated on both the original principal and the interest already added in earlier periods, so balances and debts grow faster than with simple interest.
Read definitionComprehensive car insurance is the broadest level of motor cover, paying for damage to your own car as well as damage you cause to other people's property.
Read definitionComprehensive credit reporting (CCR) is the system under which lenders share positive credit information, such as repayment history and credit limits, as well as defaults, on your credit file.
Read definitionA conditional sale is a contract where the buyer takes possession of goods but the seller keeps legal title until a stated condition, usually full payment, is met.
Read definitionA construction loan is a loan that pays for building work in stages, releasing funds as a new home, rebuild, extension or commercial development reaches each milestone.
Read definitionConsumer credit is a loan, credit card, consumer lease or other credit provided mainly for personal, household or domestic purposes and regulated by the National Credit Code.
Read definitionContents insurance is cover for the belongings inside your home, paying to repair or replace items damaged or stolen in an insured event.
Read definitionContract hire is a fixed-term vehicle or equipment lease where a business pays fixed rentals for exclusive use of the asset while the lessor keeps ownership and resale risk.
Read definitionCounter-terrorism finance (CTF) is the set of controls that prevent, detect and cut off funds flowing to terrorists, which Australian reporting entities must apply under the AML/CTF Act.
Read definitionCovenants are promises, obligations or restrictions written into a contract or recorded on land title that bind the parties, such as a borrower's promise to maintain minimum interest cover.
Read definitionCredit is the ability to borrow money or receive goods and services now in return for a promise to repay later, usually with interest and fees on agreed terms.
Read definitionA credit card is a form of revolving credit that lets you borrow up to a pre-approved limit for purchases, cash advances or short-term finance.
Read definitionA credit guide is a prescribed disclosure document that a broker or credit licensee must give a consumer before providing credit assistance, covering licence details, remuneration and complaints handling.
Read definitionCredit loss is the amount a lender or creditor expects not to recover from a loan, trade receivable or lease because the borrower fails to pay.
Read definitionA credit rating is an independent assessment of how likely a government, company or debt issue is to meet its obligations on time, graded from AAA down to D.
Read definitionCredit risk is the possibility that a borrower or counterparty will default on their contractual repayments, leaving the lender or investor with a loss.
Read definitionA credit score is a number calculated from your credit report that tells lenders how likely you are to repay, based on your borrowing history.
Read definitionA creditor is a person, business or lender that is owed money by someone else, usually under a loan, an invoice or a supply agreement.
Read definitionCross-collateralisation is a lending arrangement where one lender holds more than one of your assets as security, or one asset for more than one loan, tying them together.
Read definitionCross-default is a loan clause that puts you in default on one facility as soon as you default on another finance agreement.
Read definitionData protection is the legal duty of brokers and lenders to handle customers' personal information under the Privacy Act and the Australian Privacy Principles, from collection to secure destruction.
Read definitionDealers are businesses that buy and resell goods such as vehicles, equipment or machinery, and often arrange or introduce finance for the buyer at the point of sale.
Read definitionDebt adjusting is any arrangement that changes what a debtor owes or when they pay it, from an informal hardship variation through to a debt agreement or bankruptcy.
Read definitionDebt collection regulations are the laws, guidance and licensing rules that govern how creditors and collectors may behave when recovering money owed, including bans on harassment and misleading conduct.
Read definitionA debt consolidation loan is a personal loan used to pay out several existing debts, such as credit cards and payday loans, leaving one repayment.
Read definitionDebt counselling is a free, confidential service, known in Australia as financial counselling, that helps people in financial difficulty build a realistic budget and negotiate hardship arrangements with creditors.
Read definitionThe debt service coverage ratio (DSCR) is a lending measure that divides the cash flow available for repayments by the debt repayments due over the same period.
Read definitionA debtor is a person or business that owes money to someone else, whether under a loan, a credit account or an unpaid invoice.
Read definitionA deed of release is a signed legal document in which one party gives up a claim or a security interest against another, ending that obligation.
Read definitionA default is a borrower's failure to meet the terms of a credit contract, usually by missing repayments, which lets the lender demand the balance and enforce its security.
Read definitionDefault interest is an agreed or statutory rate of interest charged on a loan, invoice or judgment when a payment falls into arrears or a contract term is breached.
Read definitionA deposit is the upfront amount a buyer or borrower pays towards a purchase, either as part-payment on a sale contract or as cash contributed to asset finance.
Read definitionDepreciation is the fall in an asset's value over time, spread across the years the asset is used so the cost can be claimed as a tax deduction.
Read definitionA depreciation schedule is a report that lists an asset's cost, its effective life and the depreciation you can claim against income each year.
Read definitionDesign and distribution obligations (DDO) are rules requiring the issuer of a retail financial product to define its target market and distributors to take reasonable steps to sell within it.
Read definitionA direct debit is an authority, given through a Direct Debit Request (DDR), that lets a biller withdraw agreed payments from your nominated bank account, usually for recurring bills.
Read definitionA disbursement is money paid out to a third party or on your behalf, such as loan funds released at settlement or costs a solicitor pays for you.
Read definitionDistributors are businesses that buy goods from a manufacturer and resell them to dealers, retailers or end customers, often supporting the sale with pre-arranged finance programs and stocking finance.
Read definitionA dividend is a payment a company makes to its shareholders, usually out of profits, paid as cash or as extra shares.
Read definitionA dividend yield is the annual dividend per share divided by the current share price, shown as a percentage so income can be compared across shares.
Read definitionA drawdown is a borrower taking funds under an approved loan facility, in one payment or in stages, once the lender's conditions have been met.
Read definitionDual financing is a lending structure where two separate lenders finance the same borrower or project, typically a senior first-ranking facility alongside a subordinated or mezzanine loan.
Read definitionAn e-signature (electronic signature) is any electronic mark, action or process that shows a person's intention to accept the contents of an electronic document or message.
Read definitionEarly settlement is paying a loan or lease out in full before the end of its term using the lender's payout figure, or bringing a property settlement date forward.
Read definitionEarnings before interest and tax (EBIT) is a business's operating profit before financing costs and tax, showing what core operations earn regardless of debt levels or tax rates.
Read definitionEconomic life is the period during which an asset keeps earning enough to justify running it, after allowing for maintenance costs, lost efficiency, new technology and market demand.
Read definitionAn encumbrance is a claim someone else holds over an asset, such as a loan secured against it, that limits how freely it can be sold.
Read definitionEquifax is a credit reporting body (credit bureau) that collects credit information from lenders and public records to build the credit files, reports and scores used to assess applications.
Read definitionEquipment finance is business finance used to buy or lease machinery, vehicles and other equipment, where the equipment itself secures the loan or is owned by the financier.
Read definitionAn equipment schedule is the single, auditable list of the plant and machinery on a project or contract, used to manage delivery, commissioning and handover.
Read definitionEquity is the share of an asset you actually own: its market value less any debt secured against it, such as a mortgage.
Read definitionEthics in lending is the set of conduct standards that shape how brokers and lenders treat borrowers, manage conflicts of interest and make decisions beyond what the law requires.
Read definitionA facility letter is a lender's written confirmation of the terms on which it proposes to provide a loan or other finance facility to a borrower.
Read definitionA factor rate is a multiplier that short-term and alternative lenders apply to the amount borrowed to fix the total repayment, instead of quoting an annual interest rate.
Read definitionFactoring is a finance arrangement where a business sells or assigns its unpaid invoices to a specialist lender, the factor, for an immediate cash advance and outsourced collections.
Read definitionFees are the explicit charges a provider applies for a financial product or service, separate from interest and covering access, administration or transactions.
Read definitionA finance lease is a lease where the financier owns the asset and your business pays to use it for most of its life, taking on the risks of ownership.
Read definitionA financial services guide (FSG) is the plain-language disclosure document a licensed financial firm gives retail clients, explaining its services, how it is paid and how to complain.
Read definitionFintech (short for financial technology) is the use of software, data and modern infrastructure to deliver or improve financial services, from mobile payments and digital banking to online lending.
Read definitionFittings are items in a property that are not part of the permanent structure and can be removed without substantial damage, whether freestanding or only lightly attached.
Read definitionFixed assets are the long-term assets a business holds to use in its operations rather than to sell, providing economic benefits for more than one accounting period.
Read definitionA fixed charge is a security interest over a specific, identifiable asset, such as a named machine or building, which the borrower cannot deal with without the lender's consent.
Read definitionA fixed rate is an interest rate locked in for a set term, so the rate and usually the repayments do not change until that term ends.
Read definitionFixtures are items attached to land or a building so firmly that they are treated as part of the real property rather than as movable chattels.
Read definitionA flat rate is an interest method that charges a fixed percentage of the original principal for every year of the term, ignoring the balance you have repaid.
Read definitionA fleet is a group of vehicles owned, leased or managed by one organisation for business use, from a few utes and vans to hundreds of trucks and plant.
Read definitionA floating charge is a security interest over a shifting pool of assets, such as stock and receivables, that lets the business keep trading them until the charge crystallises.
Read definitionA floor rate is the minimum interest rate a variable loan contract allows; lenders also use the phrase for the minimum rate they test serviceability against.
Read definitionForeign Investment Review Board (FIRB) approval is the statutory permission a foreign person may need before acquiring Australian land, property or business interests covered by foreign investment law.
Read definitionFranchise finance is business lending for buying, starting, growing or refinancing a franchise, covering buy-in fees, fit-out, equipment, stock and working capital while allowing for royalties and franchisor fees.
Read definitionFranking credits are tax credits attached to Australian dividends that pass on company tax already paid, so shareholders are not taxed twice on the same profit.
Read definitionFraud is deliberate deception or misrepresentation intended to secure an unfair or unlawful gain or cause loss, such as false documents on a loan application.
Read definitionFringe benefits tax (FBT) is a tax employers pay on non-cash benefits given to employees, such as a work car available for private use.
Read definitionA full payout lease is a lease priced so the lessor recovers the asset's cost, finance charges and fees through the rentals, usually leaving a nominal or zero residual.
Read definitionA full service lease is a vehicle lease in which the lessor supplies the vehicle and bundles finance, maintenance, tyres, registration and fleet administration into one fixed monthly payment.
Read definitionA funder is the party that provides the capital behind a lease or loan and carries the credit risk, whether or not it is the entity named on the contract.
Read definitionFunding is the capital a business uses to start, run or grow, raised as debt, equity, grants or alternative finance.
Read definitionGoods and services tax (GST) is a broad-based 10% tax on most goods and services sold in Australia, which registered businesses collect on sales and pay to the ATO.
Read definitionGovernment grants are non-repayable payments from federal, state or local government to eligible businesses, not-for-profits or individuals to fund defined projects or outcomes under set program conditions.
Read definitionA green loan is a purpose-specific loan for energy-efficiency or renewable energy upgrades, such as solar, batteries or heat pumps, with permitted uses the lender verifies.
Read definitionGross salary is the total amount an employer agrees to pay you before tax, salary sacrifice and other deductions are taken out.
Read definitionA guarantee is a contract in which a guarantor promises a creditor to pay or perform if the principal debtor defaults, supporting the debt rather than replacing it.
Read definitionA hard asset is a tangible, physical item with intrinsic value, such as a truck or a machine, that lenders can inspect, value and take as security.
Read definitionFinancial hardship is when a change in your circumstances, such as job loss or illness, means you cannot meet your loan, credit or bill repayments on time.
Read definitionHigh net worth (HNW) is an industry label for individuals whose investable assets, net of liabilities, exceed provider thresholds that often overlap with the wholesale client tests.
Read definitionHigh value leasing is the leasing of assets, most often prestige vehicles, priced well above typical fleet or consumer levels, which raises residual risk, tax exposure and credit requirements.
Read definitionHigher deposit requirements for visa holders are lender rules that ask temporary residents for more cash upfront than citizens, capping the loan-to-value ratio.
Read definitionHire is a contract under which an owner or supplier lets a hirer use goods for an agreed period in exchange for payment, while title stays with the owner.
Read definitionHire purchase is a finance agreement where a financier buys an asset and hires it to you for fixed instalments, with ownership passing to you at the final payment.
Read definitionA home loan is a secured loan used to buy property or fund major home projects, with the lender taking a mortgage over the property as security.
Read definitionAn HPI check is a vehicle history and finance check that shows whether a used car has outstanding finance registered against it, or a stolen or written-off record.
Read definitionillion was an Australian credit reporting body, now part of Experian, whose consumer and commercial credit files still sit behind many lending decisions.
Read definitionAn independent lessor is a non-bank, non-captive finance company that owns the assets it leases and prices deals on its own underwriting appetite rather than a manufacturer's program.
Read definitionIndigenous business finance is the range of loans, grants and investment options built for Indigenous, First Nations and Aboriginal and Torres Strait Islander owned businesses.
Read definitionAn input tax credit is the GST a registered business can claim back on the price of goods and services it buys for business use.
Read definitionAn inspection is a structured check of a leased or financed asset's identity, condition and usage against the contract, done before delivery, during the term or at return.
Read definitionInstalment credit is consumer credit repaid in regular, pre-set payments of principal and interest over a fixed term, reducing the balance to zero or an agreed final amount.
Read definitionThe instant asset write-off is a tax concession that lets eligible businesses deduct the full cost of a depreciating asset in the year of first use, up to a threshold.
Read definitionInsurance is a contract where you pay a premium and an insurer covers specified losses, such as damage to a financed asset or a lender's loss on default.
Read definitionInterest is the price of using money: what a borrower pays on a loan, or a saver earns on a deposit, expressed as a percentage rate on the principal.
Read definitionInterest rate risk is the exposure a financial asset, liability or portfolio has to changes in market interest rates, which alter the present value of its future cash flows.
Read definitionInterest-free means a purchase plan or loan that charges no interest, either throughout or for a promotional period, after which any balance owing attracts the standard rate.
Read definitionInvoice discounting is a working capital facility where a lender advances most of an unpaid invoice's value and holds a reserve until your customer pays.
Read definitionInvoice fraud is a type of fraud in which criminals send fake or altered invoices, or bogus bank-detail changes, to trick a business into paying an account they control.
Read definitionLandlord insurance is cover for a rental property owner, protecting against tenant related loss such as damage, theft and lost rent, plus legal liability.
Read definitionA lease is a contract giving the lessee the right to use an asset owned by the lessor for a set term in return for payments.
Read definitionLease payments are regular amounts a lessee pays a lessor for the use of an asset over a set term, bundling a finance charge with fees and sometimes services.
Read definitionA lease purchase is a lease over a vehicle or equipment with a contractual option to buy it at the end for a pre-agreed residual value.
Read definitionA lease rate factor is the monthly rental a lessor charges per dollar of equipment cost, used to price a lease without quoting an annual rate.
Read definitionA lease term is the agreed period a lease runs, from the commencement date to expiry, which sets when rent or rentals are payable and when the lease can end.
Read definitionLease vs buy is the choice between paying to use an asset for a set term and owning it outright or with finance.
Read definitionA lessee is the party that takes the right to use an asset, such as premises, a vehicle or equipment, from the lessor under a lease.
Read definitionA lessor is the party that grants a lease of property, goods or equipment to a lessee, keeping legal title while the lessee has possession and use.
Read definitionA liability is a legal responsibility to pay money or answer for a loss; in accounting, a present obligation to transfer an economic resource, shown on the balance sheet.
Read definitionA lien is a legal right a creditor holds over another person's property, such as goods or land, as security until a debt is paid.
Read definitionA line of credit is a revolving credit facility with an approved limit that you can draw, repay and redraw, paying interest only on the drawn balance.
Read definitionLiquidation is the process of winding up a company: a liquidator takes control, sells its assets, pays creditors in a set order of priority and the company is deregistered.
Read definitionAn LMCT (licensed motor car trader) is a dealer licensed under Victoria's Motor Car Traders Act to buy, sell or exchange vehicles as a business, giving buyers statutory protections.
Read definitionA loan is money advanced by a lender to a borrower, repaid as principal plus interest over an agreed term under a contract.
Read definitionA loan-to-value ratio (LVR) is the amount you borrow as a percentage of the value of the security, usually property, and a key measure of lending risk.
Read definitionMaintenance is the inspection, servicing and repair work that keeps an asset in safe working order, and in finance and hire agreements a contractual obligation with set tasks.
Read definitionA manufacturer buy-back is a commitment by a manufacturer to repurchase a vehicle or equipment at a pre-agreed price, or on set conditions, usually when a lease ends.
Read definitionMargin is the share of each revenue dollar left after costs, what a lender adds to its base rate, or your own equity in a geared share portfolio.
Read definitionA margin call is a demand from a lender for extra cash or security when the value of the assets backing a loan falls too far.
Read definitionA master lease is an umbrella agreement: in property, a head lease taken to sublet; in equipment finance, one contract covering separate asset schedules.
Read definitionA material adverse change is a significant deterioration in your financial position that, under a MAC clause, lets a lender decline to fund a facility or demand repayment.
Read definitionA medium amount credit contract (MACC) is a non-bank consumer credit contract for more than $2,000 and up to $5,000, running from 16 days to two years.
Read definitionMezzanine finance is a hybrid layer of capital that sits between senior debt and equity, ranking behind the senior lender and often carrying equity-style upside for the financier.
Read definitionA middle-ticket lease is equipment finance for medium-value assets like trucks or medical machines, manually underwritten rather than automated, with a negotiated term and residual.
Read definitionMoney laundering is the process of disguising the origin, movement or ownership of money made from crime so that it appears legitimate and can be used openly.
Read definitionA moratorium is a temporary pause on repayments or on creditor enforcement, agreed with a lender or imposed by law, that gives a borrower or an insolvent company breathing space.
Read definitionA mortgage is the legal charge a lender registers over property to secure a loan, giving it the right to sell the property if you default.
Read definitionMulti-financing is the use of two or more finance facilities or lenders to fund business assets, matching each part of a purchase to a suitable finance option.
Read definitionThe NCCP Act is Australia's National Consumer Credit Protection Act 2009, the law that licenses credit providers and brokers and sets responsible lending and disclosure rules for consumer credit.
Read definitionNear-prime is the credit-risk band between prime and sub-prime: borrowers whose credit history is mostly positive but carries one or two risk flags that lead lenders to add conditions.
Read definitionNegative gearing is when an investment bought with borrowed money costs more to hold than it earns, and the shortfall is deducted against your other income.
Read definitionA negative pledge is a promise in a loan contract not to give any other lender security over your assets without the first lender's consent.
Read definitionA nominal rate is the headline annual interest rate a lender quotes before compounding within the year is taken into account, unlike the effective annual rate.
Read definitionA non-performing loan (NPL) is a loan where the borrower is not meeting payments and the lender judges full repayment doubtful, commonly once payments are 90 days past due.
Read definitionNon-permanent resident borrowing is lending to people on temporary Australian visas, where the home loan, car or business finance is assessed against visa term and work rights.
Read definitionNon-recourse funding is finance where the lender's recovery on default is limited to the secured asset or project and its cash flows, not the borrower's wider assets.
Read definitionA non-resident home loan is an Australian mortgage for a borrower living overseas, whether an expat, a temporary visa holder abroad or a foreign national.
Read definitionNot-for-profit finance is the set of practices, policies and controls a charity or community organisation uses to raise and manage money, reinvesting any surplus in its mission.
Read definitionA novated lease is a three-way car lease where your employer takes over the lease payments and deducts them from your salary, mostly before tax, while you work there.
Read definitionNovation is a three-party agreement that replaces one party to a contract with another, releasing the outgoing party and passing its rights and obligations to the incoming party.
Read definitionThe OAIC is the Office of the Australian Information Commissioner, Australia's independent privacy regulator, which enforces the Privacy Act, the Australian Privacy Principles and the Notifiable Data Breaches scheme.
Read definitionOff-balance-sheet (OBS) describes assets, liabilities or obligations a business is exposed to but does not record on its balance sheet, such as guarantees and some leases.
Read definitionOff-lease equipment is an asset, from laptops to utes and excavators, returned to the lessor at the end of its lease and resold on the secondary market, often refurbished.
Read definitionOpen banking is the regulated framework under Australia's Consumer Data Right (CDR) that lets you authorise accredited third parties to access specific financial data held by your bank.
Read definitionAn open-ended lease is a lease where the lessee carries the residual value risk, paying any shortfall if the asset sells for less than its residual at the end.
Read definitionAn operating lease is a lease where you pay to use an asset for a set term and hand it back, with the financier keeping ownership and the resale risk.
Read definitionAn option to purchase is a contractual right, not an obligation, to buy an asset such as land or a leased vehicle at an agreed price.
Read definitionOrigination is the whole front end of a financed transaction, from finding and qualifying the borrower through application, underwriting and approval to documentation and settlement.
Read definitionAn overdraft is a short-term credit facility attached to a transaction account that lets you spend past your available balance up to an agreed limit.
Read definitionPari passu is a Latin term meaning on equal footing: two or more lenders rank equally, so they share any recovery in proportion if the borrower defaults.
Read definitionA partner visa home loan is a residential mortgage where at least one borrower holds a partner or spouse visa, assessed on that borrower's immigration status.
Read definitionA partnership is a business structure in which two or more people or entities carry on a business together with a view to profit, sharing profits, losses and liabilities.
Read definitionA payday loan is a small, unsecured loan meant to cover an immediate shortfall, usually repaid over a short term timed around your pay cycle.
Read definitionPayment frequency is how often scheduled repayments fall due on a loan, typically weekly, fortnightly or monthly, which affects total interest, loan term and how repayments fit your cashflow.
Read definitionA payout is the total amount needed to close a loan or lease on a given date: the balance owing, accrued interest and any break costs or fees.
Read definitionPenalty interest is interest charged on an overdue amount by a revenue office, court or creditor to compensate for late payment and deter delay.
Read definitionPerfection (of a security interest) is the step that makes a lender's security effective against other creditors, usually by registering it on the PPSR.
Read definitionA personal guarantee is a legally binding promise by an individual, usually a director or business owner, to pay a creditor if the borrowing business or person defaults.
Read definitionA personal loan is a fixed term loan for personal expenses, repaid in regular instalments over an agreed period, usually principal and interest.
Read definitionThe Personal Property Securities Register (PPSR) is the national online register where lenders and suppliers record security interests over personal property such as vehicles and plant.
Read definitionPlant and machinery means the tangible assets a business uses to make, move, process or service things, such as excavators, forklifts and CNC machines.
Read definitionPolitically exposed person (PEP) checks are screening steps that flag customers who hold prominent public positions, so a lender can apply extra due diligence under anti-money laundering laws.
Read definitionA portfolio is a grouped set of loans, leases and the assets behind them, held by one lender or lessor and managed together for reporting, risk and performance.
Read definitionPrime is the lowest-risk credit tier: borrowers with a clean repayment history, stable income and low debt who receive a lender's best pricing and simplest terms.
Read definitionPrime lenders are lenders whose credit appetite is built around lower-risk borrowers: they apply conservative underwriting and stricter documentation, and offer standardised contracts and generally more favourable pricing.
Read definitionPrincipal is the amount of money you originally borrowed or, on a running loan, the part of that sum you still owe, excluding interest, fees and charges.
Read definitionThe Privacy Act 1988 is the Australian law that sets out how government agencies and many organisations must collect, use, disclose and correct personal information, including credit reporting data.
Read definitionProbability of default (PD) is an estimate of the chance that a borrower will fail to meet their contractual repayments within a set period, usually one year.
Read definitionA product disclosure statement (PDS) is the document a product issuer must give a retail customer before they buy a financial product, setting out its features, risks, fees and costs.
Read definitionProfessional indemnity insurance is business cover that pays claims arising from professional advice or services that cause a customer financial loss.
Read definitionPrudential regulation is APRA's framework of capital and risk rules designed to keep banks, insurers and superannuation funds financially sound, and it shapes how much they lend.
Read definitionA Pty Ltd company is a private company with its own legal identity that cannot offer shares to the public and limits shareholders' liability to their share capital.
Read definitionPublic liability insurance is business cover that pays compensation and legal costs when your work injures a third party or damages their property.
Read definitionA purchase price is the agreed consideration a buyer pays a seller for an asset, and it forms the base figure for finance, depreciation and tax.
Read definitionThe R&D tax incentive is a tax offset program, administered by AusIndustry and the ATO, that reduces the net cost of eligible experimental research and development for companies.
Read definitionA rate is a ratio or charge expressed against a unit, commonly per year, that measures cost, return or proportion; in finance it usually means an interest rate.
Read definitionRatio analysis is the technique of turning balance sheet, profit and loss and cash flow figures into simple ratios that show a business's liquidity, profitability, efficiency and solvency.
Read definitionThe RBA (Reserve Bank of Australia) is Australia's central bank: it sets the cash rate that flows through to loan and savings rates, and operates key payment settlement systems.
Read definitionReceivables are amounts owed to your business, mainly by customers for goods or services supplied on credit, recorded as assets on the balance sheet until they are collected.
Read definitionRecourse is a lender's or financier's right to pursue the borrower or its guarantors for what is still owed after the security or the underlying receivable falls short.
Read definitionReducing balance depreciation is a depreciation method that charges a fixed percentage of an asset's written-down value each year, so the deduction starts high and falls over time.
Read definitionRefinancing is replacing an existing loan with a new one, from the same or a different lender, to change the interest rate, term or features, or to release equity.
Read definitionRelationship lending is credit that a lender underwrites and manages using information built up over repeated dealings with the borrower, blending hard data with soft insights from relationship managers.
Read definitionA renewal option is a clause in a commercial lease that gives the tenant the right to extend the lease for a further term on pre-agreed or determined terms.
Read definitionRentals are arrangements to pay for the use of an asset without owning it, and in a lease contract the periodic payments themselves.
Read definitionRepossession is the enforced recovery of goods that secure a loan, such as a car, ute or machinery, after the borrower has defaulted on the contract.
Read definitionResidual risk is the exposure that remains after controls have been applied to an inherent risk: the risk an organisation must still accept, transfer or treat further.
Read definitionResidual value is the amount a leased car or asset is expected to be worth when the lease ends, set at the start and used to calculate the rentals.
Read definitionA residual value guarantee (RVG) is a lessee's or third party's promise to pay the lessor any shortfall if a leased asset sells for less than its agreed residual.
Read definitionResidual value insurance (RVI) is a policy that pays an owner, lessor or financier the shortfall when an asset sells below its agreed residual value at lease end.
Read definitionResponsible lending obligations are duties under the NCCP Act that require lenders and brokers to inquire into and verify a consumer's finances and not provide or suggest unsuitable credit.
Read definitionA reverse mortgage is a secured loan that lets an older homeowner borrow against the equity in their home, with no regular repayments while they live there.
Read definitionRevolving credit is a form of credit that lets you draw, repay and redraw funds up to a pre-set limit, with minimum monthly repayments.
Read definitionRisk weighting is the method banks use to scale each asset by how risky it is, so riskier lending requires more capital behind it.
Read definitionA roll-over is an automatic renewal clause that extends a fixed-term agreement for a new term unless one party gives notice to end it within the required window.
Read definitionSalary sacrifice is an agreement with your employer to receive less salary in return for benefits paid from pre-tax pay, such as extra super or a novated lease.
Read definitionA sale and leaseback is a finance transaction where a business sells an asset to a lessor and immediately leases it back, releasing cash without losing use of it.
Read definitionSales aid finance is a vendor's point-of-sale finance program that lets customers pay for a purchase in regular repayments while the lender pays the vendor at settlement.
Read definitionSalvage value is the informal name for what AASB 116 calls an asset's residual value: what it will fetch at the end of its useful life.
Read definitionSanctions checks are screening steps that test whether a person, company or transaction is subject to government sanctions, such as asset freezes, before a lender deals with them.
Read definitionA secured loan is a loan backed by an asset the lender can repossess and sell if the borrower defaults, which usually lowers the cost.
Read definitionSecuritisation is the process of pooling loans, leases or receivables into a separate vehicle that issues securities to investors, so the originator raises funding and transfers risk.
Read definitionSecurity (collateral) is an asset or legal interest a borrower grants a lender, which the lender can take and sell to recover the debt if the borrower defaults.
Read definitionA security deposit is an upfront cash contribution a borrower pays towards the purchase price of a financed asset, reducing the amount the lender funds.
Read definitionA self-managed super fund (SMSF) is a private superannuation fund of up to six members who run it themselves as trustees, taking on the fund's investment and compliance duties.
Read definitionSelf-regulation is the practice of an industry setting and enforcing its own conduct standards through voluntary codes rather than legislation; it is how most Australian commercial finance is governed.
Read definitionServiceability is a lender's test of whether you can afford the repayments on a loan from your income, after living costs, existing debts and a rate buffer.
Read definitionSettlement is the final stage of a finance deal, where the lender releases funds, security is registered and you take delivery of the asset.
Read definitionA shareholder is a person or entity that owns shares in a company, giving them a share of its profits and value while the directors run the business.
Read definitionShariah finance is a system of finance based on Islamic law that prohibits interest and requires asset-backed transactions, so returns come from trade, leasing or profit-sharing.
Read definitionA short term loan is credit with a relatively small principal and a short repayment horizon, usually twelve months or less.
Read definitionSimple interest is interest calculated only on the original principal, never on interest already added, which keeps the charge flat across the term.
Read definitionA small amount credit contract (SACC) is the statutory label for a small, short-term, unsecured consumer loan from a non-bank lender, typically a payday loan, with capped fees.
Read definitionSmall and medium-sized enterprises (SMEs) are businesses that fall below size thresholds set by government agencies, regulators and lenders, usually measured by employee headcount or aggregated annual turnover.
Read definitionA small-ticket lease is an equipment lease for relatively low-value assets, where the lessor keeps legal title and you pay fixed lease payments over an agreed term.
Read definitionA soft asset is a business asset with limited resale or repossession value, such as a fit-out, IT hardware, office furniture or a software licence.
Read definitionSoft costs are the indirect expenses of a construction project: professional fees, approvals, finance and marketing costs that support delivery but are not built into the fabric.
Read definitionA soft loan is a loan on better terms than the market offers, such as a below-market interest rate, a longer term or a repayment grace period.
Read definitionA sole trader is the simplest Australian business structure: one person owns and runs the business, keeps the profits, and is personally liable for its debts.
Read definitionSpecialist lenders for temporary residents are non-bank lenders, mortgage managers, credit unions and boutique banks that write home loans major banks decline on visa grounds.
Read definitionA spread is the difference between two related rates or prices, such as a lender's rate and its benchmark, or an asset's buy and sell price.
Read definitionA stage payment is a pre-agreed instalment of a building contract price, paid when a defined stage of work such as slab or frame is complete.
Read definitionA start-up is a new business built to find a repeatable, scalable business model under uncertainty, marked by innovation, growth intent and rapid testing rather than steady income.
Read definitionA statutory demand is a formal written demand for a company debt under the Corporations Act that, if ignored, creates a presumption of insolvency and can lead to liquidation.
Read definitionStocking finance is a short-term facility that funds a dealer's inventory unit by unit: the lender pays the supplier and the dealer repays each advance when that unit sells.
Read definitionStraight-line depreciation is a method that spreads an asset's cost, less its expected salvage value, evenly over its useful life so the same amount is deducted each year.
Read definitionStudent visa loan eligibility is the set of rules deciding whether a student visa holder can borrow from government schemes or private lenders, and on what conditions.
Read definitionSub-broking is a commercial arrangement where an individual or firm without its own licence introduces customers, generates leads or assists with transactions for a licensed broker or licence holder.
Read definitionSub-prime is the credit tier for borrowers and loans that carry materially higher risk than prime, because of a low credit score, unstable income, high debt or past defaults.
Read definitionSubordination is an agreement that ranks one debt behind another, so the subordinated lender is paid only after the senior lender has been repaid.
Read definitionSuperannuation is money set aside during your working life to fund retirement, held in a fund you generally cannot access until you reach preservation age.
Read definitionThe superannuation guarantee rate is the percentage of an employee's qualifying earnings that an employer must pay into super, set at 12% for 2026-27.
Read definitionA supplier is the party that sells the asset being financed, whether a vehicle dealer, equipment distributor, manufacturer or private seller, and is usually paid by the lender at settlement.
Read definitionA tax invoice is a document issued for a taxable sale, normally by the GST-registered seller, recording the sale and the GST payable so the buyer can claim a credit.
Read definitionTax-based leasing is an asset finance structure arranged so the lessor keeps tax ownership and claims depreciation, while the lessee uses the asset and deducts lease payments.
Read definitionThe tax-free threshold is the first $18,200 of income an Australian resident for tax purposes can earn in a financial year before income tax applies.
Read definitionTechnological obsolescence is the loss of an asset's usefulness, value or resale market because newer technology, standards or business models have superseded it, even though it may still work.
Read definitionTemporary full expensing is a time-limited tax concession that let eligible businesses deduct a qualifying asset's full cost in its first year of use instead of over its effective life.
Read definitionA temporary resident mortgage is a home loan assessed on residency status, for someone living in Australia on a temporary visa rather than as a permanent resident.
Read definitionA temporary visa home loan is a mortgage for someone who lives and works in Australia on a non-permanent visa, assessed on visa type and remaining term.
Read definitionA term is a statement in a contract that creates rights or obligations for the parties, or the period for which the agreement runs.
Read definitionA term loan is a lump sum advanced up front and repaid in scheduled instalments of principal and interest over a set term.
Read definitionA termination fee is a contractual charge for ending an agreement before its agreed end date, or for triggering a contract exit event.
Read definitionThird party car insurance is motor cover for damage you cause to other people's vehicles and property, with no cover for your own car beyond a fire and theft add-on.
Read definitionTitle is legal ownership of an asset, and the record that proves it, such as a certificate of title for land.
Read definitionTotal cost of ownership (TCO) is the full cost of buying, financing, running and disposing of an asset over a set period, not just its purchase price.
Read definitionA trade-in is the handover of an owned or financed asset, usually a vehicle or piece of equipment, to a dealer in exchange for credit towards a new purchase.
Read definitionA trust is an arrangement in which a trustee holds legal title to assets and manages them for the benefit of beneficiaries under a trust deed.
Read definitionUnderwriting is the process a lender or insurer uses to verify an application, assess the risk and decide whether to approve, decline, or approve with conditions and pricing.
Read definitionUnfair contract terms are clauses in a standard form contract that significantly favour one party, are not reasonably necessary to protect that party, and would cause detriment.
Read definitionAn unincorporated business is a business that has no separate legal personality, so its owners contract in their own names and are personally liable for its debts.
Read definitionAn unregulated agreement is a loan or other credit arrangement that sits outside the NCCP Act, usually because the credit is wholly or mainly for business purposes.
Read definitionAn unsecured loan is credit you borrow without pledging collateral, so the lender relies on your income, credit history and capacity to repay.
Read definitionAn upgrade is an agreed change that improves or replaces what a contract delivers, including a move into a newer asset under a lease or hire agreement.
Read definitionUseful life is the period an asset is expected to be available for use by a business, and the number of years over which its cost is depreciated.
Read definitionA vanilla lease is a plain commercial lease over equipment or business assets, with a fixed term, fixed payments and no bundled services or unusual clauses.
Read definitionA variable rate is an interest rate that can move up or down over the life of a loan, following the lender's benchmark and its margin.
Read definitionVendor finance is credit extended by the seller of a business or asset to the buyer, covering part or all of the purchase price and repaid in instalments.
Read definitionVisa expiry and loan term restriction is the lender practice of capping a loan term to visa expiry, or requiring a minimum stretch of visa left at application.
Read definitionVisa holder eligibility is the assessment of what a person's visa subclass, conditions and status actually allow: work, study, government programs and access to credit.
Read definitionVisa status in responsible lending is the immigration evidence a lender must verify, covering work rights, expiry and renewal prospects, before it assesses whether credit is suitable.
Read definitionWork visa lending is credit offered to people on temporary work visas, from home loans and car finance to personal loans, assessed against visa length and employment.
Read definitionWorking capital is the difference between a business's current assets and current liabilities: the measure of whether it has enough liquid resources to meet obligations due within 12 months.
Read definitionA working capital loan is short-term business finance that funds day-to-day operations, such as payroll, stock and supplier bills, rather than long-term capital purchases.
Read definitionA write-off is an accounting entry that removes an asset or unpaid customer invoice from the books because it no longer has recoverable value, recording the loss against profit.
Read definitionWritten-down value (WDV) is a depreciating asset's cost less the depreciation claimed so far, and the base for future deductions and for gains or losses on disposal.
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