Equipment funding: ovens, vans, machines and the money behind them

A commercial deck oven doubles what a bakery can produce in the morning. A second van lets a plumber run two jobs at once. A new press, a better coffee machine, a trailer, a till system: good equipment changes what a business can earn. The catch is that it asks for money on day one and pays you back over months or years.

What are my choices for getting the gear?

Four routes dominate.

1. Pay from cash. Simple and cheap in cost terms, but it can strip the working capital you need to run the business.
2. Lease. Business.gov.au describes leasing as essentially renting from a company that owns the asset, usually with lower upfront cost and easy upgrades.
3. Borrow to buy. A cash-flow or working-capital loan funds the purchase, and you own the equipment.
4. Borrow against property. If you own property, security-backed funding opens larger amounts for bigger purchases.

Business.gov.au says businesses can mix leased and bought equipment, which is a useful reminder that this is not an all-or-nothing choice.

Lease or buy: how do I choose?

The business.gov.au comparison covers cost, cash flow, flexibility, upgrades, repairs, tax and what happens when you no longer need the item. In summary:

Factor	Leasing	Buying
Upfront cost	Lower	Higher
Over time	Can add up, and you may owe the full term	Usually cheaper
Flexibility	Easy to upgrade	You can sell it or modify it
Maintenance	Often handled by the leasing company	Your responsibility
Ownership	No	Yes

Technology that changes fast, like point-of-sale or imaging gear, often suits leasing. Robust equipment with a long life, like ovens or workshop machinery, often suits buying. Your accountant can advise on tax; do not skip that conversation.

How do I check that the gear will pay for itself?

Work through a simple payback test.

1. Cost. Purchase price plus delivery, installation and training.
2. Extra income or saved cost. What does it produce each month that you cannot produce now?
3. Running costs. Power, servicing, consumables, insurance.
4. Net monthly benefit. Step 2 minus step 3.
5. Payback. Divide the cost by the net monthly benefit.

An illustration with no real business: a cafe considers a $22,000 espresso setup that serves 40 more coffees a day at a margin of $2.50 each. That adds about $3,000 a month, less $400 of extra running cost, for a net of $2,600. Payback is a little over eight months. If the repayments are lower than $2,600 a month, the machine funds itself on paper.

On paper is the operative phrase. Test it again with sales 25 per cent lower than planned.

What does funding equipment look like?

For trading businesses, unsecured funding is typically $5,000 to $500,000, sized on turnover and bank statements. That range covers a great many purchases: a van deposit, a kitchen upgrade, a machine for the workshop.

For larger purchases, property-secured funding runs from $20,000 to $5,000,000. See property-backed business loans for how equity changes what is possible.

Lenders will ask what the equipment is, what it costs, how it will earn and how you will repay. A quote from the supplier is useful evidence.

How do I protect working capital?

Equipment purchases fail more often from squeezed cash than from bad machines. Protect yourself:

• Keep a buffer for wages and tax after the purchase. The Dough gap calculator shows how many weeks of runway remain once the cost is deducted.
• Stage the purchase if the business can’t absorb it all at once.
• Negotiate delivery and payment terms with the supplier.
• Insure the asset and plan for servicing costs.

Business.gov.au also lists selling assets you no longer use, and leasing for short-term needs, among the ways to improve cash flow.

What about equipment that’s part of a bigger move?

Sometimes the machine is only one piece. A bakery expanding to a second site needs ovens, but also a fit-out, a lease deposit and extra stock. In that case the sensible approach is to fund the whole project as one plan rather than piece by piece. Our pages on shop fit-out funding and second-location funding look at the bigger picture.

It also helps to ask what else the equipment unlocks. A new oven might allow wholesale orders. A second van might let you take on a contract you would otherwise decline. When the equipment is tied to a specific, signed source of income, lenders can see a direct line from the purchase to the repayments, and that line is often the strongest part of the application.

What are the hidden costs of equipment?

The sticker price rarely tells the whole story. Delivery and installation can add a meaningful slice. Commercial gear may need power, plumbing or ventilation upgrades before it works. Staff need training, and the first weeks are slower while they learn. Servicing contracts, spare parts and insurance continue for the life of the machine. And when it breaks, the downtime costs sales.

Ask the supplier for a total cost of ownership over a few years, not just the purchase price, and ask local repairers how quickly they can attend. Business.gov.au suggests checking local repairers and prioritising quality over price for exactly this reason.

Next step

If the gear makes sense and the numbers hold, tell us about it. Start an enquiry with the equipment, the price, the payback you expect and the amount you want to fund. A lending specialist reads it and rings you. There is no credit check just to enquire, and your details are not scattered across a long list of lenders.

Real quotes and real figures speed the first call along. See if you qualify once you have the numbers.