Quick answer: typical deposits
The minimum deposit for machinery finance commonly sits between 0–30% of the purchase price. What you’ll need depends on the asset, your business profile, and the lender.
- Established business, new dealer-supplied machinery: often 0–10% (some approvals at 0%).
- Used machinery or private sale: often 10–20% (higher if older/specialised).
- Startup, low-doc or weaker credit: often 10–30%+ depending on overall strength.
- Specialised/limited-resale assets: typically toward the higher end of the range.
These ranges are indicative. Lenders look at the full picture, not just one factor.
How deposit requirements work
In machinery finance, the “deposit” is your upfront contribution that lowers the lender’s risk by reducing the loan-to-value ratio (LVR). Lower LVRs can make approvals easier, allow sharper pricing, or support a more flexible residual/balloon.
Deposit expectations vary by product:
- Chattel Mortgage / Commercial Hire Purchase: commonly 0–20% depending on file strength and asset.
- Finance Lease / Operating Lease: focus is on rental and residual setting; some files still benefit from upfront rent/deposit.
GST can often be financed as part of the total, or you may choose to pay GST upfront to reduce the amount financed. If you are GST-registered, you may claim input tax credits on your BAS. Seek independent tax advice.
What affects the minimum deposit?
- Business profile: time trading, profit trend, balance sheet strength, cash flow, ATO status.
- Credit history: score, recent enquiries, any paid/unpaid defaults or payment arrangements.
- Documentation: full-financials vs low-doc; stronger docs can reduce or remove deposit needs.
- Asset details: new vs used, age/hours, brand, resale market, specialisation, attachments.
- Supplier and sale type: dealer vs private sale vs auction; private/auction usually need more deposit.
- Loan size and term: larger loans and longer terms may attract more conservative structures.
- Residual/balloon: higher residuals sometimes need a counterbalance via deposit.
- Security and guarantees: director guarantees or additional security can strengthen the file.
Learn about no-deposit asset finance | Ask what’s realistic for you
Approval and documentation
Stronger documentation can reduce or remove deposit requirements. Lenders commonly look for:
- Quote/invoice, asset spec sheet, supplier details.
- ABN and GST registration, identification, entity structure.
- Recent financial statements or BAS, management accounts, and bank statements.
- ATO portal status and explanations for any arrears with a plan in place.
- For startups: business plan, contracts/pipeline, cash flow forecast, relevant industry experience.
Machinery finance requirements | Improve your file to lower deposit
Typical deposit by scenario (indicative)
- New excavator from a dealer, established profitable business: 0–10% possible.
- Used loader (private sale), average credit, limited docs: 10–20% is common.
- Startup earthmoving operator buying first machine: 10–30% depending on experience and contracts.
- Older, highly specialised machinery with limited resale: 20%+ often required.
These are not quote rates or offers. They simply illustrate how deposit ranges shift with risk.
Ways to reduce or avoid a deposit
- Provide stronger docs (financials, BAS, bank statements) to support a lower LVR.
- Choose new or mainstream assets with strong resale and dealer support.
- Consider including GST in the finance amount if appropriate for your tax position.
- Use a realistic residual/balloon that the lender is comfortable with at term-end.
- Offer a trade-in or vendor rebate to reduce the net amount financed.
- Demonstrate relevant experience, signed contracts, or pipeline to support cash flow.
- If credit is weaker, stabilise bank conduct and address ATO arrears before applying.
Low-doc asset finance | Bad credit asset finance | See if you qualify for no-deposit
Simple examples
- $150,000 new machine with 0% deposit: you finance the full price (often GST-inclusive). A moderate residual can help keep repayments steady, provided end-of-term value is sensible.
- $150,000 used machine with 20% deposit: your upfront $30,000 reduces the loan to $120,000, which may assist approval and potentially improve pricing.
- Startup with signed contract: a 10–25% deposit plus clear cash flow evidence and industry experience can make the difference between approval and decline.
How balloons/residuals work | Work out a structure that fits
Get help with deposits and structure
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Frequently asked questions
What is the minimum deposit for machinery finance?
Typically 0–30% depending on the asset, your trading strength, credit history, and documentation. New dealer-supplied machinery for established businesses can sometimes be approved with no deposit.
Can I do machinery finance with no deposit?
Often yes, if your profile is strong: stable trading, clean credit and bank conduct, and a standard asset. If risk is higher (startup, private sale, older or specialised machines), lenders may request a deposit.
Does product type change the deposit?
Chattel mortgage and hire purchase frequently allow low or no deposit if the file is strong. Finance lease and operating lease focus on residuals and risk, but some scenarios still benefit from upfront rent/deposit.
How does GST work with the deposit?
Many lenders can include GST in the total financed amount. If you are GST-registered, you may claim the GST on your BAS. Some businesses choose to pay the GST upfront to reduce the financed amount. Get tax advice for your situation.
Will a bigger deposit guarantee approval?
No. It helps, but lenders still assess cash flow, credit history, asset type, and documentation. A strong overall file is the best path to approval and competitive pricing.
What if I’m a startup or have weaker credit?
You may be asked for a higher deposit (often 10–30%+). Strengthening your application with contracts, experience, and clean bank conduct can improve outcomes.
Final takeaway
The minimum deposit for machinery finance is not one-size-fits-all. It’s shaped by your business profile, the asset, the structure (term and residual), and documentation. A tailored approach can reduce or even remove the deposit while keeping repayments realistic.
If you want a quick read on what’s achievable for your next machine, share a few details and we’ll guide you through options. Start here.