Equipment & leasing
Equipment finance, matched to how the asset earns.
Machinery, vehicles and technology, financed against the asset. Chattel mortgage, finance lease or operating lease, compared side by side.
You don’t pay to compare.
No credit file impact · No cost to compare · No obligation
The three products
Own it, lease it, or rent it.
Compared
Side by side, at a glance.
| Chattel mortgage | Finance lease | Operating lease | |
|---|---|---|---|
| Amount | $10,000 to $2,000,000 asset value | $5,000 to $5,000,000 asset value | $5,000 to $2,000,000 asset value |
| Term | 1 to 7 years, fixed, with an optional balloon | 1 to 7 years, fixed | 1 to 5 years, fixed |
| Security | A mortgage over the asset (PPSR), not your home | The asset itself, which the lender owns during the term | The equipment itself; some lessors add a director’s guarantee |
| How you pay | Fixed repayments; you own the asset from settlement | Fixed monthly rentals, then a residual to own | A fixed monthly rental, with no ownership |
| End of term | Pay any balloon; you already own it | Pay the residual to own, refinance it, or return the asset | None. Return, upgrade, or buy at fair market value |
| Suits | A business buying vehicles or machinery it wants to own and keep | A business that wants lower rentals and to decide on ownership later | A business with equipment that dates quickly and needs upgrading |
| In full | Chattel Mortgage | Finance Lease | Operating Lease |
Indicative, and subject to lender assessment.
Is it right for you?
When equipment finance fits, and when it doesn’t.
Often fits
- Vehicles and machinery you want to own
- Lower monthly rentals, with the ownership decision deferred
- Assets that lose value or date quickly
- A term matched to the asset’s useful life
Usually not
- Cash flow that runs in cycles, where a line of credit may fit
- Waiting on invoices you’ve already issued, where invoice finance may fit
Illustrative example
One $100,000 asset, leased, or bought with a loan.
With a lease you pay a 10% residual (balloon) at the end of the term to own the asset, for lower monthly payments. With a loan you own the asset from day one, with no balloon at the end.
Illustrative only, from the calculator in our lease or buy guide.
- The asset
- $100,000 of equipment, financed over 36 months
- Finance lease at 8% p.a.
- $2,887 a month, then the $10,000 residual. Total cost: $113,930
- Equipment loan at 8% p.a.
- $3,134 a month, with no residual. Total cost: $112,811
- The difference
- The lease costs $1,119 more over the term, once the residual is included
Pre-GST financing cost only; GST timing differs between structures.
Simple rates p.a., indicative market ranges, not quotes. APRs are higher once fees are included; your Compare Report shows the APR for each option.
Business funding, compared on real data, in three steps.
How It WorksQuestions about equipment finance.
How does a chattel mortgage differ from a lease?
With a chattel mortgage, you own the asset from day one. With a lease, the lender owns the asset and you pay to use it. Chattel mortgages offer ownership benefits and, if you’re registered, GST claims upfront.
What is the difference between a finance lease and an operating lease?
The key difference is ownership. With a finance lease, you have the option, and usually the intention, to own the asset at the end of the term by paying a residual. The asset appears on your balance sheet as both an asset and a liability. With an operating lease, you simply use the asset and return it at the end of the term, with no ownership transfer.
How do you get paid?
Comparing costs you nothing. Not comparing can cost you plenty.
The headline rate rarely tells the whole story. Fees, charges and loan terms can add far more to what you repay. That’s why your Compare Report shows every cost we can identify side by side.
In most cases, the lender pays us, and only if you decide to proceed with their product offer. For more complex deals, or where the lender pays us little or nothing, we may charge a success fee. It doesn’t happen often, but when it does, it’s shown on your Compare Report and we’ll walk you through it before you decide.
No obligation to proceed, ever.
Related
Read more, or work out the cost.
See your options, side by side.
No credit file impact · No cost to compare · No obligation
Or talk to us: 1300 161 641 · support@tradefunding.com.au