The interest rate is one of six things that determine what equipment finance costs, and the other five usually matter more. Structure, term, balloon, fees and the asset itself move the total cost of finance further than the rate does.

That is not a hedge. It is arithmetic, and here is the arithmetic.

Black Mountain Financial places equipment finance across the ACT and regional NSW through a panel of more than 100 lenders. The same machine prices differently at different funders. Access to that spread is half the job. Structure is the other half.

What are the six things that actually move your cost?

Six variables set the total cost of finance: the asset, your trading history, the structure, the term, the balloon and the fees. The rate sits inside them.

The asset

  • What it moves: Which lenders look at it, and on what term

Trading history

  • What it moves: Whether you are priced as known or unknown risk

Structure

  • What it moves: GST timing, ownership, cost of exit

Term

  • What it moves: Total interest paid, exposure at the end

Balloon

  • What it moves: Repayment down, total cost up

Fees

  • What it moves: Dollars the headline rate never shows

The asset itself

Lenders price the resale market as well as your business. A generic asset with a deep buyer pool is cheaper to finance than a specialised one. A standard-spec excavator sells anywhere in the country. A purpose-built processing line does not.

Age works the same way. Lenders assess the asset at the end of the term, not the start. A seven-year-old machine on a five-year term is twelve years old at the final payment. That shortens terms on used plant, and the limit differs from lender to lender. Ask us what the panel will accept on the machine you are buying.

Your trading history

ABN and GST tenure, your financials and your ATO position decide one thing: whether you price as a known risk or an unknown one.

Three years of lodged financials make you cheap to assess. Fourteen months with a full order book is not worse, only harder to evidence. If you carry an ATO payment plan, say so at the outset. Plans being met are a normal file. Plans found late cost you the deal.

The structure

Chattel mortgage, finance lease and hire purchase move the same money. Each produces a different total cost, different GST timing and a different exit.

Under a chattel mortgage, business.gov.au notes you own the asset from the start, with regular payments and the option of a balloon. Under hire purchase you pay a deposit, then instalments, and own the item on the final payment. A lease leaves ownership with the financier, so your end-of-term position is a negotiation. That is where total cost hides. A residual you do not control can cost more than a balloon you set. See chattel mortgage, lease and hire purchase compared.

Structure drives GST timing too. The ATO treats hire purchase agreements entered into on or after 1 July 2012 as fully taxable. That holds whether or not interest is separately disclosed. Chattel mortgage timing mirrors that, but you take title from purchase. We are brokers, not tax agents. Confirm your position with your accountant and at ato.gov.au.

The term against the asset's useful life

A longer term lowers the monthly repayment and raises the total interest paid. That is arithmetic, not a lender trick.

The judgement call is whether the term outruns the asset. Finance a machine over seven years when you replace it every four. You pay three years for something you no longer run. Set the term to your replacement cycle first.

The balloon

A balloon lowers your monthly repayment by deferring principal to the end of the term. It does not reduce what you owe. It moves it.

The trap is a balloon above what the asset is worth the day it falls due. You then have three exits: pay it from cash, refinance it, or sell and fund the shortfall. Refinancing is a fresh credit decision on an older asset, never automatic. Set the balloon under the expected trade value, not at whatever makes the repayment comfortable.

The fees

Fees are real dollars the headline rate never shows. Ask for each in writing.

  • Establishment or application fee — at settlement, sometimes capitalised.
  • Documentation fee — separate at some funders, bundled at others.
  • PPSR registration — the lender registers its interest on the Personal Property Securities Register and passes on the cost. Ask for the amount in writing.
  • Monthly account fee — small, until you multiply it by the term.
  • How we're paid — on most commercial files, the lender pays us a commission on settlement. On some files — complex, development or private-credit deals, restructures, and smaller deals where that commission doesn't cover the work — a fee for service may apply, instead of or alongside the commission. Any fee is agreed and disclosed in writing before any work starts.
  • Early payout and break costs — the fee most operators never check.

Does a lower rate always cost less?

No. A lower rate over a longer term can cost more in total than a higher rate over a shorter one. A bigger balloon does the same. What matters is the total cost of finance across the term.

The figures below are hypothetical, chosen to make the mechanism visible. They are not quotes and not market rates. Illustrative and deal-dependent, subject to lender assessment.

Amount financed

  • Quote A — lower rate: $300,000
  • Quote B — higher rate: $300,000

Term

  • Quote A — lower rate: 84 months
  • Quote B — higher rate: 60 months

Balloon

  • Quote A — lower rate: 30% ($90,000)
  • Quote B — higher rate: Nil

Monthly repayment

  • Quote A — lower rate: $3,600
  • Quote B — higher rate: $5,900

Total of monthly payments

  • Quote A — lower rate: $302,400
  • Quote B — higher rate: $354,000

Balloon due at end

  • Quote A — lower rate: $90,000
  • Quote B — higher rate: Nil

Fees over the term

  • Quote A — lower rate: $1,500
  • Quote B — higher rate: $1,200

Total repaid

  • Quote A — lower rate: $393,900
  • Quote B — higher rate: $355,200

Total cost of finance

  • Quote A — lower rate: $93,900
  • Quote B — higher rate: $55,200

Hypothetical figures, chosen to show the mechanism. No market rate is stated or implied, and none should be inferred from the payment, term and balloon combination above.

Quote A carries the lower interest rate. It also costs $38,700 more.

Its repayment is $2,300 lighter, and for some businesses that is the right trade. Cashflow has a price too. Make it knowingly, with the $38,700 in front of you. Run your own numbers in the equipment finance calculator.

What does a good equipment finance quote look like?

A good quote states the total cost of finance in dollars. It itemises every fee, and it tells you what happens if you exit early. Ask for all six in writing.

1. The effective rate, not the headline rate. The rate with all fees in, plus the total of all payments in dollars. 2. Every fee itemised. Establishment, documentation, PPSR, monthly account, broker fee. Upfront or capitalised? 3. The early payout method. How is it calculated, is unearned interest rebated, do break costs apply? Ask for a worked figure at month 24. 4. The balloon in dollars, not percent. A percentage says nothing about whether the asset will cover it. 5. Security and guarantees. Is the asset the only security? Is a director's guarantee required? Is any other asset caught by the documents? 6. Selling mid-term. How the payout works, how the PPSR registration is discharged against that serial or VIN, how quickly title clears.

Why do brokers get different pricing on the same asset?

Because the same deal prices differently at different lenders, and a wide panel finds where it prices best. Ours runs past 100 lenders: the majors, non-banks, and specialist asset financiers.

Panel breadth. One lender gives one answer. A panel gives a range, and that range on a single asset is wider than most operators expect.

Lender appetite. A funder building a book in yellow goods this quarter prices differently from one that has just filled it. That is invisible from outside a panel.

How the deal is presented. A submission that answers the assessor's questions before they are asked gets a cleaner decision. A bare application invites conditions, and conditions cost money. George Popadalis runs every file personally, with 20+ years across banking & finance behind it.

Why doesn't this page publish an equipment finance rate table?

Because we cannot publish one that would be true. Pricing moves with the lender, the asset, the term and your file. A table averaging all of that is stale within a month, or hedged until it means nothing.

So we made a decision. Black Mountain Financial publishes no rate here without a current lender rate card George has verified, dated and diarised. Nothing meets that standard today.

We quote your actual deal instead. Bring the asset, the invoice and your ABN. Already hold a quote? Bring it and we will read it against the panel. If it is sharp, we will say so. If we are not a fit, you have still had a useful conversation.

Start with equipment finance, and check the instant asset write-off with your accountant before you set a purchase date.

Frequently Asked Questions

What is a good rate for equipment finance?

The one that gives the lowest total cost of finance on your deal. A sharp rate on a long term with a big balloon can cost more than a higher rate over a short term. Illustrative and deal-dependent, subject to lender assessment.

Why won't you tell me your rates?

Because we would have to invent them. We have a panel of more than 100 lenders, each pricing your asset, your history and your structure differently. Any number published here would be a guess dressed as information.

Are non-bank rates higher than the banks?

On the files we place, non-bank money generally prices dearer than bank money. That is our own deal experience, not market data, and it is deal-dependent. Read it as cost against opportunity cost. The question is what not proceeding costs you: the contract you cannot service, the work you turn down. Sometimes the dearer money is the better deal. Sometimes not.

Can I get a better rate going direct to the bank?

Sometimes, and if your file suits their credit policy you probably should. It stops working when your deal sits outside that policy, or the asset is one they do not write. Your bank made a sensible decision for their book, not a verdict on your business.

I have been trading under two years. Does that cost me more?

It narrows the panel, which usually moves pricing. A shorter trading history isn't an automatic no. Some funders will consider a business under two years old where there's strong asset security, an established director track record, or contracted forward income — assessed case by case, and never guaranteed. If it's not a fit, we'll tell you early.