What is farm equipment finance?
Farm equipment finance is a loan or lease that funds machinery and vehicles used in agricultural production, secured against the asset itself rather than the farm's real property. It covers tractors, harvesters, headers, balers, irrigation systems, utes and specialised attachments. The lender registers a security interest on the PPSR, the farmer keeps working the equipment, and the debt runs alongside the farm's normal operating finance rather than against the family title.
That's the machinery piece. Agribusiness finance is broader: it also covers land, livestock and the seasonal working capital that carries a farm between harvests. Each has a different structure, a different lender pool and a different rate band, and treating them as one product is where most farm finance conversations go wrong.
The four shapes of agribusiness finance
- Machinery and equipment finance — chattel mortgage, hire purchase or lease against a depreciating asset. Rates start around 6.59% p.a. as at July 2026 for strong-profile borrowers on new equipment, and climb for used machinery, older ABNs and non-standard assets.
- Rural property and land finance — commercial mortgages against freehold farmland, typically at lower LVRs than residential property because rural land is harder to value and slower to sell.
- Livestock finance — funding to build or carry a herd or flock, usually secured by a PPSR interest over the livestock plus other assets, since stock numbers and values move with the season.
- Seasonal working capital — cashflow finance timed to input costs (seed, fertiliser, fuel) and repaid after the harvest or sale rather than on a flat monthly schedule.
Chattel mortgage: the default structure for machinery
A chattel mortgage gives the farmer ownership of the equipment from settlement, while the lender registers security on the PPSR until the loan clears. It's the standard structure for GST-registered agribusinesses buying tractors, headers and harvesters, because the GST credit on the purchase price can be claimed in full on the next BAS. For the tractor market specifically — compact utility through to articulated 4WD — the tractor finance guide goes deeper.
On a $200,000 header, that's roughly $18,000 back within one BAS cycle rather than spread across the loan term. Assets under $20,000 may also qualify for the instant asset write-off in the 2025–26 income year, letting an eligible small business (turnover under $10M) deduct the full cost immediately instead of depreciating it. Chattel mortgage vs operating lease is the more relevant decision for equipment a farm plans to rotate every few years rather than run to the end of its working life. The lease keeps the asset off balance sheet, but the farmer never owns it.
Land, livestock and equipment sit on different security
Machinery finance is asset-specific: the lender's risk is the tractor, so approval turns on the asset's age, value and resale market. Land finance is a commercial mortgage assessed on the property's LVR, the farm's income history and, often, a valuation that accounts for water rights, carrying capacity and soil type rather than just hectares. Livestock finance sits in between: some specialist agribusiness lenders will register a PPSR interest over a herd, but most want it paired with real property or other security, because a mob's value can swing hard between a good season and a drought year.
Seasonal working capital: matching repayments to the harvest
A dairy or cropping operation doesn't earn evenly across twelve months, and a loan that demands flat monthly repayments regardless of season is a mismatch most banks won't fix on their own. Specialist agribusiness lenders will structure repayments quarterly, half-yearly or annually to line up with harvest, shearing or milk cheques, which is where cashflow finance genuinely earns its place in a farm's structure rather than sitting as a generic overdraft.
Government-backed options: where RIC fits
The Regional Investment Corporation runs three loan products relevant to primary producers: the Farm Investment Loan, the AgriStarter Loan and the Drought Loan, all currently priced at a variable 5.18% p.a. and on hold since August 2024. The Farm Investment Loan funds up to $2M over 10 years, with the first five years interest-only before moving to principal and interest. RIC loans generally require the applicant to show a commercial lender won't offer comparable terms, so they sit alongside a bank or broker application rather than replacing it.
Bank, specialist and RIC: how they compare
These groups sit within the broader six categories of business lender, but for a farm the shortlist usually comes down to four.
| Source | Typical rate | Best for | Turnaround |
|---|---|---|---|
| Major bank agribusiness lending | Competitive on rate, conservative on serviceability | Established farms with strong, evenly spread income | Weeks, heavier documentation |
| Specialist asset/agribusiness lenders | From ~6.59%–7.49% p.a. on machinery | Seasonal income, newer ABNs, used or non-standard equipment | Days |
| RIC government loans | 5.18% p.a. variable | Farms that can show a commercial lender won't match the terms | Weeks, eligibility-dependent |
| Private agribusiness lenders | Roughly 9.5%–13.5% p.a. | Time-critical deals or security a bank won't accept | Days |
What lenders actually assess
- Serviceability across seasons, not just the last BAS — most agribusiness credit teams average income over two to three years to smooth out a drought or flood year.
- Security type and asset age — new machinery finances more cheaply than a 20-year-old header; land finance turns on the valuation, not the purchase price.
- ABN and GST history — 12–24 months trading is the usual floor for standard-doc approval; newer operations lean on low-doc structures or a guarantor.
- Purpose — a lender wants to know whether the funds replace worn equipment, expand capacity, or bridge a cashflow gap, because that shapes the right structure.
How long settlement takes
Most machinery finance settles in 3–7 business days once documents are signed, assuming a standard asset and a clean credit file. Land-backed rural finance runs longer, typically 4–8 weeks, largely because of valuation turnaround on rural title. Livestock and working capital facilities generally sit closer to the machinery timeline once security is agreed.
Where a broker fits
A farm might need a chattel mortgage on a new baler, a commercial mortgage on an adjoining block and a seasonal cashflow facility, all in the same year, from three different lender categories. Aurelius Capital writes across major banks, specialist agribusiness financiers and the RIC and private-lending channel, and structures the deal around the asset and the season rather than pushing every request through one panel. Asset finance is the service desk most farm machinery work runs through.
If you're financing machinery, land or a livestock purchase and want a broker's read on structure and lender fit before you approach anyone directly, the application form is below. Most enquiries get a response within four business hours.
Sources
- Farm Equipment Finance Australia — Emu Money
- RIC variable interest rate on hold at 5.18% from 1 February 2026 — Regional Investment Corporation
- $20,000 instant asset write-off for 2025–26 — Australian Taxation Office
- Farm Investment Loans — business.gov.au
- Farm Equipment Finance Australia: Agricultural Banking vs Specialist Finance — Broker.com.au
- Agribusiness Loans Australia: Private Lending for Farmers and Rural Operators — Innovate Funding