Overview: when is a deposit required?
Short answer: a deposit is usually required when lender risk or policy says so. Common triggers include new businesses, weaker credit, older or specialised assets, private sales, large amounts that exceed loan-to-value (LVR) caps, or when GST/soft costs push the financed amount over policy.
- Risk-based: deposit reduces the lender’s exposure or brings LVR within policy.
- Policy-based: some lenders only fund up to a set percentage of the asset price (ex‑GST or inc‑GST), or exclude “soft costs.”
- Documentation-based: stronger financials and clean conduct can support true 0% deposit.
If you’re unsure where your scenario sits, a quick lender-policy check is fastest.
How lenders assess “no deposit” (LVR, risk and policy)
“No deposit” is assessed against the lender’s maximum LVR for the asset class and the applicant’s profile. LVR is how much the lender will fund relative to the asset value. If your request exceeds policy, a deposit is used to bridge the gap.
- Asset value basis: some lenders fund ex‑GST (you cover GST up front, then claim it back on BAS); others fund inc‑GST.
- Asset class: mainstream vehicles/equipment often attract higher LVRs than niche or soft assets (e.g., IT, fit-outs).
- Condition and source: brand‑new from a licensed dealer is usually easier than older, high‑hours or private‑sale assets.
- Credit strength: time trading, paid‑as‑agreed history, and stable cash flow support 0% deposit outcomes.
- Structure: balloon/residual must align with lender tables; stretching beyond policy can trigger a deposit.
When a deposit is likely required
- New or young business
- ABN under 12–24 months or limited BAS history often requires 10–30% to de‑risk the file.
- Limited documentation (low‑doc)
- No recent financials/BAS or thin bank statements may prompt a policy deposit.
- Adverse credit or weaker scores
- Paid/unpaid defaults, arrears, recent ATO debt arrangements or external repayment stress can lead to a deposit request.
- Older, high‑hours or “soft” assets
- Assets with faster depreciation or limited resale depth (certain IT, fit‑outs, specialised plant) often attract lower LVRs.
- Private sale or auction purchases
- Lower transparency and no statutory warranty can reduce LVR versus licensed dealer purchases.
- Large exposure or policy caps exceeded
- When total facility size, concentration to one supplier, or requested residual exceeds policy.
- Soft costs included
- Delivery, installation, warranties, software and training may be only partly funded; you cover the rest as a deposit.
- GST treatment
- If a lender funds ex‑GST, you may need to pay the GST at settlement (then claim it back on your BAS).
When 0% deposit is often possible
- Established, profitable trading with clean bank conduct and on‑time obligations.
- New or near‑new assets from licensed dealers in mainstream categories (vehicles, common machinery).
- Amount and residual within lender policy tables for the asset and term.
- Full‑doc submission (financials/BAS) or strong low‑doc surrogates (bank statements, management reports).
- Directors with stable tenure, acceptable credit and, ideally, property ties (not mandatory with all lenders).
- Lender funds inc‑GST and allows approved soft costs to be capitalised within LVR limits.
For an end‑to‑end explainer of structure, see How No Deposit Asset Finance Works and No Deposit Asset Finance Requirements.
How much deposit is required if one applies?
It depends on the gap between your request and lender policy. As a guide, deposits typically range from 5–30% for risk or policy reasons.
- GST example: $80,000 inc‑GST vehicle, lender funds ex‑GST only
- Funded amount: $72,727 ex‑GST. You pay the $7,273 GST at settlement (often treated like a “deposit”), then claim it back on your next BAS if eligible.
- Soft asset example: $120,000 inc‑GST with significant installation/software
- If the lender caps soft costs at 10% of the asset price and you exceed that, you may contribute the excess up front.
- Policy/LVR example: startup buying used equipment
- If the policy LVR is 80% for that profile/asset, a 20% deposit fills the gap.
Practical ways to avoid or reduce a deposit
- Provide stronger docs
- Recent financials, BAS, bank statements and ATO portal screenshots support 0% deposit outcomes.
- Choose asset and source carefully
- Newer assets and licensed dealers often improve LVR versus older/private‑sale items.
- Right‑size the residual/balloon
- Keep within policy to prevent a deposit being used to compensate for an oversized balloon.
- Use trade‑ins or manufacturer rebates
- These can count like a deposit and reduce out‑of‑pocket cash.
- Offer additional security if appropriate
- Cross‑collateral or guarantees can sometimes increase LVR with selected lenders.
- Separate soft costs
- Pay for software/training upfront and finance the hard asset to stay within policy.
For context on pricing trade‑offs, see No Deposit Asset Finance Interest Rates and No Deposit Asset Finance Balloon Payments.
Product differences that affect deposits
- Chattel Mortgage
- Common for vehicles and equipment; GST may be claimable up front on your BAS. Learn more: Chattel Mortgage Australia and Minimum Deposit for Chattel Mortgage.
- Hire Purchase
- Similar commercial outcomes to chattel mortgage; accounting and GST timing can differ. See Hire Purchase Australia and Minimum Deposit for Hire Purchase.
- Finance Lease or Operating Lease
- Residuals are governed by ATO/industry tables; deposits can still apply where LVR or policy requires. See Finance Lease Australia, Finance Lease Deposit Requirements and Operating Lease Australia.
For a broader view, compare How Asset Finance Works and How to Choose Asset Finance.
Documentation that helps avoid a deposit
Clear, recent documentation reduces uncertainty and can remove the need for a deposit:
- Business financials (P&L, balance sheet) and BAS for the last 12–24 months.
- Primary trading bank statements (typically 6–12 months) with clean conduct.
- ATO portal screenshots (lodgements up to date), plus any payment plans on track.
- Asset quote with full specs, VIN/serials, hours/kms, and supplier details.
- For private sales: proof of ownership, PPSR clear, condition reports, photos and service history.
See also No Deposit Asset Finance Requirements and Minimum Credit Score for No Deposit Asset Finance.
Frequently asked questions
When is a deposit required for no deposit asset finance?
A deposit is typically required when your request breaches lender LVR or risk policy. Common reasons include new businesses, weaker credit, older or soft assets, private sales, large exposure, oversized balloons, or when GST/soft costs push the amount over policy.
How big will the deposit be?
It depends on the policy gap, but 5–30% is common. For ex‑GST lenders, you may also need to pay the GST at settlement, then claim it back on your BAS if eligible.
Can I still get 0% deposit as a startup?
Sometimes, if other strengths offset early‑stage risk (clean credit, strong bank conduct, relevant industry experience, cash reserves, new mainstream assets). Many startups are asked for 10–30%.
Do private sales usually need a deposit?
Often yes. Lower transparency and no statutory warranty reduce LVR compared with licensed dealer purchases.
Does choosing a bigger balloon remove the need for a deposit?
Not if it breaches policy. If your residual is above lender tables, the lender may still require a deposit or a lower balloon to bring the deal back within limits.
Which products are best for 0% deposit?
Chattel mortgage and hire purchase are common for 0% deposit where the profile and asset fit policy. Leases can also be structured at 0% deposit if LVR and residual tables are met.
Get a deposit check and options
Send your details for a fast view on whether a deposit will be required in your case, and how to reduce or remove it where possible.
Final takeaway
“No deposit” is achievable when asset, structure and borrower profile line up with lender policy. A deposit is still required when risk or LVR caps are exceeded, or when GST/soft costs and documentation gaps push the deal outside guidelines.
The fastest path is a quick policy check against your asset and financials, then shaping the structure (term, residual, inclusions) to minimise cash up front while keeping the deal sustainable.