Replacement Equipment Finance: An Easier Path to Upgrading

A range of Australian equipment financiers and banks offer a streamlined application for businesses replacing equipment or vehicles. This is known as replacement finance.

If your business is making, or has recently finished making, repayments on equipment or vehicles under a chattel mortgage, hire purchase or lease, you may be able to apply for replacement finance. Depending on the lender, the application may be streamlined, often without business financials.

When can replacement finance be used?

Depending on the financier, it may be available in these scenarios:

• Replacing with similar equipment, or with a different type of equipment, where:
• the equipment is currently under finance, whether or not the term is nearly over
• the finance is ending and the final or balloon payment is falling due. If you have a balloon coming up, this is a good time to look at your options
• the finance was paid out or completed in recent months

Where existing finance is still running, it must be paid out before or when the replacement is financed. Businesses often do this with trade-in proceeds, a private sale of the old equipment, or cash.

Lender policies vary

• Many lenders will refinance equipment or vehicle finance held with another financier, most commonly when a balloon (final) payment is coming due. Others will only look at their own customers.
• Funding a different type of equipment is fine for some lenders but not others.
• Eligible equipment types vary.
• How much can be financed varies, and may depend on the goods type, the previous amount financed and its repayments, and how many payments you've made so far.

Benefits of replacement finance

• A simpler application, often without business financials.
• A way to upgrade equipment that's ageing and becoming costly to run and maintain.
• Useful when your accountant hasn't finished your latest financials. For a grower between seasons or a contractor waiting on year-end accounts, that timing can matter.

Does replacement finance cost more?

Not necessarily. Pricing depends on the lender and your circumstances, not just how the application is assessed. Lenders use replacement finance to retain good customers, and a streamlined assessment takes less of their time to process. We can compare options with you.

How do I apply?

Each lender's policies differ and change often. As brokers who work with them daily, we can help identify which lenders' replacement policies are likely to suit your scenario, then facilitate the application. Replacement finance is one part of our wider equipment finance services.

Start with our No-Financials Quick Assessment for a likely, maybe or unlikely read (it isn't an approval or a borrowing limit), or enquire about replacement finance.

Choice doesn’t have to come at a cost

We don't charge customers a fee for arranging finance; the lender pays the broker. In rare cases there may be an upfront charge for a specific extra service the lender doesn't cover, such as an equipment inspection. Lenders may charge their own establishment fees, and government fees can apply depending on the finance type.
How brokers are paid.

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