Is the GST payable considered part of the loan deposit?

No, Goods and Services Tax is separate from a loan deposit, though it impacts upfront cash flow. Under a chattel mortgage agreement, lenders often fund the full purchase price including GST. If your business is registered on a cash accounting basis, you claim the total GST component back on your next Business Activity Statement to repay that portion to the financier.

Can I use an existing vehicle or machine as a trade-in deposit?

Yes, equity from a trade-in can serve as your upfront financial contribution. Lenders and commercial dealerships accept unencumbered machinery or vehicles to offset the total invoice price. If finance is still owing on your trade-in, the dealer settles the outstanding payout figure with your current financier, and the remaining net equity is applied directly to reduce your new borrowing amount.

How does equipment age influence the required deposit amount?

Equipment older than five to seven years at the end of the loan term usually requires a larger cash deposit. Australian lenders enforce age and use limits on secondary assets such as used earthmoving gear or commercial utes. If an asset exceeds standard operational life thresholds, financiers minimise their resale recovery risk by requesting a 10% to 30% upfront cash contribution.

Can a sole trader get equipment finance with no deposit?

Yes, sole traders can access zero-deposit equipment finance through low-doc commercial loan facilities. To qualify without upfront cash, lenders generally mandate an active Australian Business Number registered for GST for at least 12 to 24 months, clean credit conduct, and evidence of business asset backing or property ownership. Without property backing, a 10% deposit is frequently requested.

What upfront fees apply if the finance requires no deposit?

Even with a zero-deposit loan, upfront out-of-pocket expenses may still apply before equipment delivery. Common non-financed upfront costs include lender origination fees, broker establishment charges, Personal Property Securities Register registration fees, and comprehensive commercial machinery insurance premiums. Lenders occasionally allow these administrative charges to be capitalised directly into the monthly repayment schedule rather than paid over the counter.

What deposit do I need for equipment finance in Australia?

Equipment finance in Australia often requires a 0% to 20% deposit. Learn how asset age, credit history, GST, and chattel mortgages impact your upfront costs.

Quick answer

Most Australian lenders require between 0% and 20% deposit for equipment finance. Established businesses buying new commercial assets regularly secure 100% funding with no cash down. Used machinery, private purchases, or businesses trading under two years generally require a 10% to 20% upfront deposit to secure commercial approval.

Skill level: General guidance
Time: Varies
Trade: Business & Equipment Finance
Updated: 3 November 2026

Tools you will need

Xero Standard Accounting - Cloud Financial Management Software
MYOB Business Pro - Commercial Bookkeeping & BAS Ledger
PPSR Search Portal - Australian Personal Property Securities Register Verification
ATO Business Portal - BAS & GST Registration Reporting Tool
Equifax Commercial - Australian Business Credit Score Report
D&B Hoovers - Trade Credit Assessment Software

What deposit is typically required for equipment finance in Australia?

A common question before applying for equipment finance is whether you need to put money down upfront. In Australia, the answer depends on the type of asset, the lender, your business profile and how the deal is structured — so understanding deposits, GST, trade-ins and other upfront costs can make a big difference to cash flow planning.

What key factors influence equipment finance deposit requirements?

A deposit is not always mandatory for equipment finance, but some lenders may ask for one depending on the age and type of equipment, your trading history, your credit profile and how much you’re borrowing relative to the asset value.

“Upfront cost” can mean more than just a deposit. You may also need to budget for GST treatment, stamp duty where relevant, establishment fees, broker fees if applicable, insurance and any delivery or installation costs tied to the asset.

New equipment and standard commercial assets can sometimes be easier to finance with a lower upfront contribution than older, specialised or imported equipment. Lenders generally see resale value and ease of repossession as part of their risk assessment.

The structure matters. A chattel mortgage, finance lease, commercial hire purchase or rental arrangement can affect what is paid upfront, how repayments work and whether a balloon payment is used at the end. The best fit depends on your business circumstances and tax position.

If you’re self-employed, newly trading or applying low-doc, a lender may place more weight on your deposit, BAS statements, bank statements or evidence of contracts. ASIC’s Moneysmart resources are useful for understanding how business borrowing works generally, while ATO guidance should be checked for current tax treatment and any instant asset write-off rules.

How does a finance specialist assess deposit requirements for equipment?

Whether the equipment is new, used or specialised, and how that affects lender appetite, residual value and likely deposit expectations.

Your business trading history, ABN and GST registration, recent BAS or financials, bank conduct and whether the application is full-doc or low-doc.

How the total project cost is made up, including the purchase price, GST, accessories, freight, installation and insurance, not just the invoice amount.

Whether a trade-in, property security, director guarantee or stronger cash position could reduce risk from a lender’s point of view.

Which structure may suit your cash flow and tax setup in general terms, including whether preserving working capital is more important than lowering ongoing repayments.

Common Costly Mistakes

Assuming “no deposit” means no upfront costs at all.

Using all available cash for a deposit and leaving too little working capital for wages, fuel, stock or tax.

Applying before checking whether the equipment type or age fits mainstream lender policy.

Focusing only on the monthly repayment without understanding balloon payments, GST timing or total finance cost.

When To Get Professional Help

If you’re comparing multiple lenders, buying used or specialised equipment, or trying to keep upfront costs low without hurting approval chances, this is where DIY research usually runs out. A specialist can help you understand what lenders are likely to assess under commercial credit policies and, where relevant, obligations under the National Consumer Credit Protection framework.

Talk To A Specialist

If you want clarity on what deposit may be required for your equipment purchase, it’s sensible to speak with a finance specialist before you apply. They can help you compare how different structures and lender policies may affect your upfront costs and cash flow, subject to lender criteria. Get started here: /finance/enquire?service=finance

Frequently Asked Questions

Do I always need a deposit for equipment finance in Australia?

No — some equipment finance applications can proceed without a deposit, but that is not universal. Lenders look at the asset, your business profile and the overall risk of the deal, so some applicants may be asked to contribute funds upfront while others may not.

Is GST the same as the deposit?

No. GST and deposit are different things, although both can affect your upfront cash requirement. Depending on the structure, GST may be payable upfront or financed, and the ATO’s current rules and your GST registration status will influence how this works in practice.

Can I use a trade-in instead of paying cash upfront?

Often, a trade-in can help reduce the amount you need to finance, which may lower the lender’s risk. Whether this works cleanly depends on the supplier agreement, the asset value and the lender’s policy, so it’s worth having the numbers reviewed before proceeding.

Will a bigger deposit improve my approval chances?

In general, a larger deposit can reduce the amount being financed and may make an application look stronger, but it does not guarantee approval. Lenders still assess serviceability, credit history, asset suitability and business stability.

Can sole traders and contractors get equipment finance with a low deposit?

Sometimes, yes, but it depends on the strength of the application. Sole traders and contractors may be asked for supporting documents such as BAS, bank statements, tax returns or proof of ongoing work, especially in low-doc scenarios.

Important — General Information Only

This information is general in nature only and is not personal business or equipment finance advice. It does not take into account your objectives, financial situation or needs, and you should consider your own circumstances and seek advice from an appropriately licensed or registered professional before acting. Lending is subject to lender criteria and, where applicable, responsible lending obligations under the National Consumer Credit Protection framework. For authoritative guidance, refer to ASIC and Moneysmart, and check current tax treatment and instant asset write-off rules with the ATO.

Frequently asked questions

Do I always need a deposit for equipment finance in Australia?: No, you do not always need a cash deposit for Australian equipment finance. Many lenders approve 100% finance with a zero-dollar deposit for established businesses purchasing brand-new, primary commercial assets. However, older machinery, private sales, or start-up operations with less than two years of Australian Business Number registration typically require an upfront equity contribution of 10% to 20%.
Is the GST payable considered part of the loan deposit?: No, Goods and Services Tax is separate from a loan deposit, though it impacts upfront cash flow. Under a chattel mortgage agreement, lenders often fund the full purchase price including GST. If your business is registered on a cash accounting basis, you claim the total GST component back on your next Business Activity Statement to repay that portion to the financier.
Can I use an existing vehicle or machine as a trade-in deposit?: Yes, equity from a trade-in can serve as your upfront financial contribution. Lenders and commercial dealerships accept unencumbered machinery or vehicles to offset the total invoice price. If finance is still owing on your trade-in, the dealer settles the outstanding payout figure with your current financier, and the remaining net equity is applied directly to reduce your new borrowing amount.
How does equipment age influence the required deposit amount?: Equipment older than five to seven years at the end of the loan term usually requires a larger cash deposit. Australian lenders enforce age and use limits on secondary assets such as used earthmoving gear or commercial utes. If an asset exceeds standard operational life thresholds, financiers minimise their resale recovery risk by requesting a 10% to 30% upfront cash contribution.
Can a sole trader get equipment finance with no deposit?: Yes, sole traders can access zero-deposit equipment finance through low-doc commercial loan facilities. To qualify without upfront cash, lenders generally mandate an active Australian Business Number registered for GST for at least 12 to 24 months, clean credit conduct, and evidence of business asset backing or property ownership. Without property backing, a 10% deposit is frequently requested.
What upfront fees apply if the finance requires no deposit?: Even with a zero-deposit loan, upfront out-of-pocket expenses may still apply before equipment delivery. Common non-financed upfront costs include lender origination fees, broker establishment charges, Personal Property Securities Register registration fees, and comprehensive commercial machinery insurance premiums. Lenders occasionally allow these administrative charges to be capitalised directly into the monthly repayment schedule rather than paid over the counter.

Written by Capital, the Business & Equipment Finance specialist at QLD.Tools.