A new ute for the tradie business, a commercial oven for the café, diagnostic equipment for the clinic. The right equipment can help your business grow, but paying for it upfront can put real pressure on cash flow. Asset finance is one way to spread that cost, and an asset finance broker can help you make sense of the options.

In this guide, we'll explain what asset finance is, the common ways it's structured, what an asset finance broker does, and what to weigh up before you sign. If you're looking at asset finance in Melbourne, the same principles apply.

What is asset finance?

Asset finance is funding used to buy or use a business asset, such as a vehicle, machinery, tools, technology or specialist equipment. Instead of paying the full price on day one, you make regular payments over an agreed term.

In most cases, the asset itself acts as security. That often makes it more accessible than unsecured borrowing, but it also means the lender can take the asset back if repayments aren't made.

Common types of asset finance

There are a few main ways asset finance can be set up. The names can sound similar, so here's a plain-English overview.

Secured loan (often called a chattel mortgage)

The lender provides a loan to buy the asset, and your business owns it from the start. The lender holds security over the asset until the loan is repaid. You may be able to include a balloon payment, which is a larger lump sum at the end of the term that lowers your regular repayments but has to be planned for.

Hire purchase

You use the asset and pay for it in instalments. Ownership passes to you once the final payment is made. As with a loan, a larger final payment may reduce the instalments along the way.

Leasing

With a lease, the finance company owns the asset and you pay to use it for an agreed period. Leasing can mean lower upfront costs, easier budgeting and the option to upgrade more often. On the other hand, you may pay more overall, you can't sell the asset, and you may need to keep paying for the full lease term even if you stop using it.

Each structure has different tax and GST implications, so it's important to talk to your accountant or a registered tax professional before you decide which one fits your business.

What does an asset finance broker do?

An asset finance broker works between you and the lenders on their panel. Their job is to help you understand your options and manage the process, so you can stay focused on running the business. Typically, an asset finance broker will:

Get to know your business: what the asset is for, how it earns income for you and how repayments fit your cash flow.
Explain the structures: such as a secured loan, hire purchase or lease, and how each one affects ownership, repayments and end-of-term obligations.
Compare lenders: looking at interest rates, fees, terms, balloon options and conditions across the lenders they can access.
Prepare your application: gathering documents such as financial statements, tax returns and details of the asset and supplier.
Coordinate with the supplier and lender: so the finance can be in place when the asset is ready.

A broker isn't a lender, and they can't promise approval or a particular rate. Each lender makes its own decision based on your business and the asset.

Who uses asset finance?

This kind of finance is common across many industries, including:

Trade contractors who need vehicles and tools.
Transport and logistics operators with trucks and trailers.
Medical and allied health practices buying specialist equipment.
Cafés, restaurants and other hospitality businesses fitting out kitchens.
Manufacturers and agricultural businesses investing in machinery.

Whether you're a sole trader or a growing company, the key question is the same: does the asset earn its keep, and can your cash flow comfortably cover the repayments?

Benefits and trade-offs to weigh up

What it can offer:

Keeps more cash in the business for wages, stock and day-to-day costs.
Regular repayments that can make budgeting more predictable.
Access to equipment sooner, so it can start contributing to the business.

What to keep in mind:

The total cost: interest and fees add up over the term, so look beyond the regular repayment.
Balloon payments: a lower repayment now can mean a large lump sum later. Make sure you can cover it.
Security: if repayments aren't met, the lender can repossess the asset.
Fit for the asset's life: try not to be paying for equipment long after it's worn out or outdated.
Business-purpose lending is different: loans that are mainly for business purposes generally aren't covered by the consumer credit protections that apply to personal loans, so read the contract carefully and get advice where you need it.

Tips before you apply

Work out what you can afford: calculate a monthly repayment your business can manage, even in a slower month.
Know your asset: have the supplier quote, model details and whether it's new or used.
Shop around: compare more than one lender or lease provider, and check the companies you're dealing with are reputable.
Check the end of term: understand exactly what happens when the finance ends, including any balloon or residual payment.
Talk to your accountant: especially about tax deductions, depreciation and GST.

Frequently asked questions

Is asset finance the same as a business loan?

Asset finance is a type of business finance, but it's tied to a specific asset that usually acts as security. A general business loan may be used for many purposes and may be secured or unsecured.

Can I finance used equipment?

Often, yes, although lender policies vary depending on the age and type of asset.

Do I need an asset finance broker?

Not necessarily. Some businesses go directly to a lender or supplier. A broker can help if you'd like to compare several options, need help understanding the structures, or want support with the paperwork.

Is Asset Finance the Right Fit for Your Business?

Asset finance can help you get the vehicles and equipment your business needs while protecting your cash flow, but the structure you choose affects ownership, costs and your obligations at the end of the term. An asset finance broker can explain the differences and compare options for you, while the final decision stays with you.

If you'd like help with the next step, here's how we can support you.

Need an Asset Finance Broker in Melbourne? TNL Finance Can Help

Whether it's a work ute, a commercial oven or specialist equipment, you don't have to work out the funding on your own. TNL Finance is a Melbourne mortgage and finance broker based in Sunshine, and we compare asset and equipment finance options from 40+ banks and specialist lenders. With 5+ years of experience in the Australian banking and finance industry, we'll explain the differences between the main structures in plain English, help prepare your application and support you through to settlement.

90% Submission to Settlement Rate: Around 90% of loan applications submitted to lenders successfully proceed through to settlement.
70% Lead to Settlement Rate: Around 70% of initial client leads ultimately proceed through to settlement.

Note: Settlement statistics are based on internal TNL Finance historical client data. Individual outcomes depend on property valuation, current financial circumstances, and specific lender credit policies.

The final lending decision rests with the lender, and you're never obliged to proceed. To talk through your next vehicle or equipment purchase, get in touch with TNL Finance for a relaxed, complimentary chat.

Asset Finance Broker: How They Help You Fund Vehicles and Equipment