Quick answer
For an equipment or vehicle purchase, add four items to your normal pack: a written quote or invoice that names the asset and supplier, evidence of any deposit you are paying, a short insurance plan, and a payback note explaining what the asset earns or saves. The asset's role in the business is the story the assessor needs to follow, so write it down.
Key points
- Four extras: quote or invoice, deposit evidence, insurance plan, payback note.
- The quote should name the asset, supplier, price and GST treatment.
- A payback note ties the purchase to revenue or savings.
- Equipment and vehicle finance are among the debt options business.gov.au lists.
Why is an equipment purchase a special case?
Because the money has a visible destination. In most business loans the use of funds is a sentence; in an equipment purchase it is an object with a price, a supplier and a job to do. That makes the application easier to follow, provided you document the object and its job.
business.gov.au lists equipment-related options among the ways to fund a business, naming hire purchase, chattel mortgages and equipment leases alongside banks and non-bank lenders. Whatever structure ends up fitting, the paperwork starts in the same place: what exactly are you buying, from whom, for how much, and what will it do for the business?
What are the four extras?
| Item | What it proves | Where it comes from |
|---|---|---|
| Written quote or invoice | The asset, the supplier and the price are real | Supplier |
| Deposit evidence | Your own contribution, and where it came from | Bank statement or receipt |
| Insurance plan | The asset will be protected | Your insurer or broker |
| Payback note | What the asset earns or saves | You |
These sit on top of your normal pack. Pick your structure from the document packs and add the four.
What makes a quote useful?
A good quote reads like a mini-contract. Check it has all of these.
- Supplier’s legal name and ABN. Check the ABN in ABN Lookup, which shows entity name and status.
- A precise description. Make, model, year, options, serial or VIN where they exist.
- The price and GST treatment, stated clearly.
- Delivery and installation terms, if relevant.
- A validity date, so the assessor knows the price is current.
Vague quotes (“one excavator, as discussed”) invite questions. A quote that matches the supplier’s real details removes one category of risk from the assessor’s view.
How do I write the payback note?
Five lines. Be specific and conservative.
- What it is: “A second panel van, fitted with racking.”
- What job it does: “Lets us run two crews instead of one.”
- What it earns or saves: “The extra crew can take on the waiting jobs, around [your figure] a week” (use your own numbers).
- Evidence: “Four customers are already on a waiting list; emails attached.”
- How it connects to repayment: “The added weekly revenue covers the repayment with room to spare.”
Avoid dramatic projections. Assessors discount hope and respect evidence, so the waiting list and the signed jobs matter more than the forecast.
Illustrative example. A commercial bakery wants a second oven. The pack includes the supplier’s quote (named, ABN verified, model and serial detail), a bank line showing a deposit paid, an insurance quote and a short note: “Current oven runs at capacity from 3 a.m.; two wholesale customers are waiting. The second oven allows a second daily bake.” The assessor can see the asset, the price and the reason on one page.
What about used equipment and auctions?
The extra care is about title and condition. Include the seller’s identity and details, how the sale will be completed and proof that the seller can sell the item. An independent inspection report or condition notes help. For vehicles, include the registration details and any identification numbers. Where possible, run the purchase through a channel that provides clear paperwork.
If the purchase is urgent and the paperwork is thin, say so. A specialist can tell you what is workable and what is not.
Should I pay a large deposit?
A deposit shows commitment and reduces the amount borrowed, but it also reduces your cash buffer. The serviceability page explains the room-left test; run it both ways before you decide. If the deposit comes from savings or a family member, caption it in the same way as any other unusual deposit, as described in unexplained deposits and mismatches.
What should I not do before the application is settled?
Do not pay for the asset in full from the business account if you plan to finance it, since that changes your cash position and statements before the file is read. Do not sign the supplier’s contract without checking the conditions. And do not buy first and ask later; the order matters. The common stalls are covered in what stalls a file.
Does the pack change for property security?
If you are using property as security for the purchase, add the property layer to the four extras. The asset story stays the same; the security story is added.
How do I present the equipment itself?
An assessor wants to know exactly what is being bought, and whether it holds value. Give the asset an identity. Where the item is a vehicle or machine, list the make, model, year and any serial or identification number. Where it is a set of items, itemise them. The more precisely the asset is described, the more easily its value can be checked and the more clearly it can be the security.
Attach three things to the description:
- The quote or contract, current and in the name of the borrower.
- A photograph or specification sheet, if it helps to show what the item is.
- A line on where it will live, for example “in the Geelong workshop” or “on site with the crew”.
The last one sounds trivial, but it helps with insurance and with the lender’s understanding of how the asset will be used.
How should I explain why this item and not another?
Briefly. A lender is not judging your taste in machinery, but a sentence about why this choice makes sense reads as thought. “Chosen because it handles the larger sheet size our two biggest customers require” is far more convincing than a silent quote. If you compared two or three options, say so and name the criteria: capacity, running costs, service availability.
If the purchase replaces an older item, say what happens to the old one. Selling it can reduce the amount you need to borrow; keeping it as a backup is a different story. Either is fine as long as it is written down.
Illustrative example. A printer buys a larger press. His note says the old press will be sold, that the quote for the new one includes installation, and that two regular customers have asked for the larger format. The assessor can see why the machine exists, what happens to the old one and where the extra work comes from.
What about insurance, servicing and running costs?
Equipment is not only a purchase price. It has a life: insurance, servicing, consumables, perhaps operator training. An application that mentions these shows the owner has thought past the delivery date.
You do not need exact figures for the covering note. State the categories and your plan: “insured under the existing business policy, with the lender’s interest to be noted”, “serviced annually under the supplier’s maintenance plan”. If you do not yet know the insurance arrangement, say that you will arrange it before settlement. Most lenders will want evidence of insurance on a secured asset, and having it ready avoids a late condition.
How do I handle the supplier relationship?
The supplier is a third party to the loan, but they often matter. They need to be paid, they may have terms about deposits and delivery, and they may be asked to confirm details of the sale. Tell the specialist who the supplier is, whether they are related to you in any way and how payment will be made.
If the supplier is related, say so plainly. A related-party sale is not wrong, but an assessor will want to know the price was set at arm’s length. If the purchase is from an auction or a private seller, take extra care with the documentation, because there is no trade supplier to stand behind the invoice.
What timing questions should I settle first?
Three. When does the quote expire? When do you need the item in service? When does any deposit fall due? A quote that expires in a fortnight can make a file feel urgent when it is not, and a deposit due in a week can push you toward the wrong funding choice. Ask the supplier for sensible validity, and tell the specialist the real dates on the first call, so the plan is built around them.
Ready to lodge?
With the quote in hand and the payback note written, lodge a free enquiry. It takes about a minute, involves no credit check at this stage, and goes to one real person, not a crowd of lenders.
Put the real price and the real purpose on the form, and say whether property is in the picture. The more exact the details, the shorter the first call, and the four extras you have prepared will answer the documents request before it is even sent.
Frequently asked questions
Do I need a quote before I lodge an enquiry?
No. The enquiry takes about a minute and needs no attachments. A quote is requested once a specialist has talked through the purchase with you.
What should a good quote include?
The supplier's legal name and ABN, a clear description of the asset (make, model, year, identifying numbers where they exist), price, GST treatment, delivery arrangements and a validity date.
What if I am buying second-hand or at auction?
Include the listing or auction details, the seller's identity and, when available, an inspection report or condition notes. Private sales need extra care with the seller's details and proof of title.
How do I show the deposit?
A bank statement line showing the deposit leaving your account, or a receipt from the supplier. If it comes from savings or a related party, caption it.
Does the asset itself count as security?
In some structures, yes, and in others the facility is arranged differently. A specialist will explain which applies, which is another reason to get the quote details right.