Asset finance, sometimes called equipment finance or hire purchase, is the default for buying vans, diggers, ovens, CNC machines and the like. The lender takes security over the thing you’re buying, registers it on the PPSR, and you repay over its useful life. It’s efficient and often competitively priced. We’d usually suggest it first. But it doesn’t fit every purchase.
When asset finance doesn’t fit
- Older assets. Many financiers limit the age of vehicles and equipment they’ll fund.
- Specialised gear. A bespoke machine or custom fit-out has a thin resale market, so lenders are cautious.
- Private sales and auctions. Some financiers prefer dealer invoices.
- Bundles. Buying a whole workshop’s worth of tools, or a business with its equipment, doesn’t map neatly to one asset.
- Soft costs. Installation, freight, training and fit-out often can’t be financed as the asset.
- Credit history. Some asset financiers are as policy-bound as banks.
The alternatives
Property-secured business loan
If you own property with equity, a property-secured loan from $20,000 to $1m can fund the purchase outright, including soft costs, from any seller. Owning the asset outright also means no PPSR registration over it, which can make resale simpler. No financials or tax returns are needed for the initial assessment. See second-mortgage business funding.
Unsecured business loan
For businesses trading 6+ months, an unsecured loan sized on turnover can cover moderate purchases, particularly used or specialist items that asset financiers turn away.
Business line of credit
Handy for a steady trickle of smaller tools and replacement parts rather than one big purchase. See business line of credit.
Leasing or rent-to-own
For fast-depreciating or technology items, leasing (where you never own the asset) can make sense. It shifts obsolescence risk to the lessor.
Buying second-hand with cash
Sometimes the cheapest route is simply to buy a good used item outright from trading cash flow. Check the PPSR first.
Side by side
| Option | Suits | Watch for |
|---|---|---|
| Asset finance | New or near-new, resaleable assets from dealers | Age limits, specialist items |
| Property-secured loan | Large, bundled or specialist purchases | Property on the line; plan your exit |
| Unsecured loan | Moderate purchases, private sellers | Sized to turnover |
| Line of credit | Regular small tool and parts spend | Don’t fund long-life assets on revolving credit |
| Leasing | Tech and fast-depreciating gear | You don’t own it at the end |
Before you buy used equipment
- Search the PPSR for existing security interests.
- Get an independent check on condition, particularly for plant and vehicles.
- Confirm GST treatment with your accountant.
- Make sure the funding covers freight, installation and commissioning.
An example
Example scenario (illustrative only): A Dunedin joinery workshop wants to buy a used edgebander and a dust extraction system from a business that’s closing down, plus pay an electrician to install them. The asset financier will fund neither the older machine nor the installation. A property-secured loan against the owners’ rental property covers the lot, and they plan to repay it from the extra production capacity over the medium term.
How we help
We arrange property-secured business loans from $20,000 to $1m, and unsecured loans and lines of credit for businesses usually trading 6+ months. If standard asset finance would suit you better, we’ll say so. Start with a 60-second enquiry.