The short version
Asset finance funds a vehicle, a piece of plant or a technology upgrade for a business, secured against the asset itself rather than the owner's home. Aurelius Capital arranges it across a panel of more than 130 lenders: the major banks, the second-tier banks and the specialist asset-finance houses that most bank managers don't mention. Most clean deals settle in 3 to 7 business days from signed documents.
That's the short answer. The longer one is that "asset finance" covers four different legal structures, and picking the wrong one costs more over the loan term than a slightly worse rate.
What is asset finance and how does it work
Asset finance is a loan or lease secured against a depreciating business asset, with the lender registering an interest on the Personal Property Securities Register (PPSR) instead of relying purely on the borrower's balance sheet. That security lets lenders fund equipment, vehicles and machinery for businesses that wouldn't get the same amount unsecured.
Four structures sit inside the category:
- Chattel mortgage. The business owns the asset from settlement. The lender registers a PPSR interest and the loan clears in fixed instalments, usually over one to seven years.
- Hire purchase. The lender holds title until the final payment, then ownership transfers. Less common now than chattel mortgage for GST-registered businesses, because the GST timing works differently.
- Finance lease. The lender owns the asset for the lease term. At the end, the business can pay a residual to keep it, extend the lease or hand it back.
- Operating lease. The lender owns and often maintains the asset throughout. The business pays to use it and returns it, with no ownership event and no balloon payment.
The right structure depends on whether the business wants the depreciation, wants the asset off its balance sheet, or wants to cycle the fleet or fit-out every three to five years. For a longer breakdown of the two structures businesses most often confuse, see chattel mortgage vs operating lease.
Chattel mortgage vs hire purchase vs operating lease
| Structure | Who owns the asset | Best suited to | GST timing |
|---|---|---|---|
| Chattel mortgage | Business, from day one | Businesses that want the asset and the depreciation | GST claimed upfront on the full price |
| Hire purchase | Lender, until final payment | Businesses wanting fixed terms without an upfront GST claim | GST claimed on each instalment |
| Operating lease | Lender, for the full term | Businesses cycling vehicles or tech every 3–5 years | GST claimed on each rental payment |
What assets qualify for asset finance
Any asset with a resale market and a defined useful life qualifies. That covers:
- Cars, utes, trucks and trailers, financed individually or as a fleet
- Excavators, loaders and other yellow goods
- Manufacturing and processing equipment
- Medical and dental equipment
- Tractors, harvesters and other agricultural machinery
- Technology, EFTPOS hardware and shop or office fit-out
Aurelius Capital goes into more detail on the equipment finance page, with sector guides on tractor finance, farm equipment finance, medical equipment finance and asset finance for tradies. A recent example: an $850K equipment hire facility we arranged for an Adelaide operator expanding its fleet.
Asset finance rates in 2026
Most asset finance in Australia runs on a fixed rate, so repayments don't move once the RBA changes the cash rate. The cash rate has held at 4.35% since 17 June 2026 and the Reserve Bank left it unchanged again at its August meeting. Asset finance pricing sits above that base, with the margin set by the asset's age and resale value, the deposit, the borrower's credit history and the loan term.
Publicly tracked chattel mortgage rates for prime SME borrowers sit roughly between 7.95% and 10.95% p.a. in mid-2026. Late-model vehicles and standard plant price towards the bottom of that range; older, specialised or imported equipment sits towards the top. Establishment fees, monthly account fees and early payout charges move the real cost of a deal more than a small rate difference, so it's worth asking for all three on every quote.
Tax treatment and the instant asset write-off
Assets funded through asset finance depreciate under Division 40 of the tax law. Businesses with turnover under $10M can claim an immediate deduction of up to $20,000 per asset under the instant asset write-off, provided the asset is first used or installed ready for use between 1 July 2025 and 30 June 2026. The 2026–27 Federal Budget locked the $20,000 threshold in as a permanent feature rather than a year-by-year extension. Assets priced above the threshold depreciate over their effective life instead. An accountant should confirm which treatment fits a specific purchase, since the finance structure and the tax outcome move together.
How long asset finance takes to settle
Clean deals, meaning good credit, verifiable income and a standard asset, settle in 3 to 7 business days once documents are signed. Low-doc applications typically add 3 to 5 days. Specialised or imported assets, or anything needing an independent valuation, can run two to three weeks. The bottleneck is almost always document return from the borrower, not lender turnaround.
Get a broker's read before you sign
Chattel mortgage, hire purchase, operating lease and finance lease move the numbers differently on a $150K excavator or a five-vehicle fleet. Aurelius Capital compares the deal across its lender panel and comes back with the structure, the lender and the likely rate before you commit. Apply here, or read the full guide on how asset finance works in Australia for more detail on eligibility and documentation.