Business Finance Lease

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Business Finance Lease
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After easily comparing, select the lender who best suits you.


Key features:

  • Borrow from $5,000 to $500,000

  • Fixed or variable interest rates

  • Repayments to suit your budget

  • Terms from 1 month to 5 years

  • Secured & unsecured options

Who is eligible?

  • Own a business and have an ABN

  • Business is GST-registered

  • Permanent Citizenship or Residency

  • Minimum business-operating time of six months

  • Can provide business bank statements

Learn more about a finance lease

What is a finance lease for businesses?

A finance lease allows a borrower to have the use of an asset (business equipment) and the benefits of ownership, while the lender retains actual ownership of the asset until the end of the lease. As all risk is transferred to the borrower, a finance lease will often have lower interest rates than other types of equipment finance.

A finance lease is a type of business equipment finance in Australia. A finance lease is used for long-term high-value assets — e.g. medical equipment or heavy machinery — and provides greater owner benefits for a borrower than an operating lease.

  • Suitable for high-value assets

  • Longer lease terms

  • Full ownership benefits

  • Borrower takes full responsibility

  • No options to upgrade your asset

  • Similar to standard small business finance

How to choose the right type of business finance lease

Both types of lease allow a business to access business equipment through regular finance repayments. The main difference between a finance lease and other types of lease is in ownership at the end of the lease term — a finance lease will allow a borrower to take ownership of the asset.

  • Ownership - Ownership of the property is transferred to the borrower at the end of the lease term.

  • Residual Payments - A balloon/residual option for the lessee to purchase the property or equipment at a specific price.

  • Running costs & administration - The borrower is responsible for all associated costs with owning and using the asset during the lease.

  • Accounting and Tax - The asset is listed on the business’s balance sheet. Lease payments are listed on profit and loss statements. Payments are generally tax-deductible.

The lender will purchase the asset on behalf of the customer, who then pays the lender a fixed monthly lease rental — plus interest — for the term of the lease.

At the end of the lease, the asset is often purchased by the business at an agreed price, or returned to the lender.

The asset is listed on the business’s balance sheet, and lease repayments to the lender are generally tax-deductible.

A finance lease uses fixed-rate payments, which ensures that repayments will stay the same regardless of changes to interest rates.

However, as the business takes full responsibility for the asset, it will also need to consider any additional costs such as repairs, maintenance, or servicing.

With a finance lease, you’ll pay close to the full value of the asset over the agreed term. Your lender will decide at the start of the contract how much they expect the asset to be worth by the end, and your final payment will be based on that anticipated value.

How to use a finance lease for your business

A finance lease is often used for high-value assets — such as medical equipment or business machinery — which the borrower intends to take ownership of at the end of the lease. The business will also benefit by claiming tax on its finance lease payments.

The business will have both the use of business equipment and the benefits of ownership, while the lender will have actual ownership of the asset.

This means you’ll be responsible for any maintenance and repairs, but it also means there is very low risk to the lender — which often results in lower rates.

Most businesses use a finance lease to purchase expensive assets while still maintaining operating cash flow and working capital. Residual payments are set at the start of a lease, which means a business can also profit if the asset’s value is higher than initially assessed.

How to qualify and apply

You can apply for a finance lease the same you would for most equipment finance applications. You can qualify for an operating lease if you:

  • Have been trading for at least 12 months; and

  • Have an ABN; and

  • Are registered for GST; and

  • Have a clean credit history; and

  • Own property or can provide a 20% deposit

If you don’t meet the above criteria, you can still get approved if you:

  • Are self-employed or a sole trader

  • Have been trading for between 6 - 12 months

  • Have an imperfect credit history

  • Do not own property

There are two main types of applications, which will depend on the amount you wish to borrow. If you are borrowing less than $100,000 the approval process will be fairly simple. Most times, just your business bank statements will be sufficient to illustrate your monthly business revenue.

If you wish to borrow more than $100,000, your lender will require additional documentation to assess your application.

If this is the case, you’ll need to provide additional documentation to the lender so they can better assess your application. Here are some tips to improve your chances of getting approved. Here’s what you may need to provide to a lender when applying:

If you are borrowing less than $100,000:

  • Proof of identity

  • An ABN and GST registration

  • An acceptable credit rating — the lender will ask to conduct a credit check

  • Business bank statements

  • Trust Deed if the business is held in a trust

  • Australian Tax Office (ATO) Portal access.

If you are borrowing more than $100,000:

  • All the documentation provided if borrowing less than $100,000; and

  • Financial records (provided by your accountant)

  • Profit and Loss Statements

  • Balance Sheet

If you are making an application for more than $100,000, you can speak to your bank or a lender directly to discuss your financial circumstances and need for finance.

If you are applying for less than $100,000, you can generally apply online with a number of different specialist business finance lenders, including those who provide leases designed specifically for small businesses.

Lenders will assess an application based on the monthly revenue of the business, its intended use for the loan, how the loan will benefit future business revenue, and more.

Each lender will have different approval criteria, but here are some tips to improve your chances of getting approved.

  • Demonstrate an ability to service your business loan or lease.

  • Meet the lender's criteria for acceptable credit rating

  • Meet the lender's criteria for minimum turnover and maximum debt

  • Provide profit and loss statements and your business balance sheet

  • Provide details of the asset you wish to purchase

  • Provide read-only access to your business bank statements

  • Provide a personal guarantee by the director of the company

Finance lease interest rates will vary between lenders, however they will generally be lower than low-value-asset lease options and fit-out finance.

This is due to the value of the assets available under this lease option, which include high-value machinery and equipment which can serve as collateral on the loan amount.

Your personal and business financials will be taken into account when assessing your application, along with the type of asset you wish to finance and its age.

You can use the smart form to compare loan offers from real Australian lenders and apply directly from your results. These lenders offer the fastest approval speed in return for charging higher interest rates than a bank.

Summary icon


The main benefit of a finance lease is flexibility at the end of the lease term. In general, the cost of the asset will be spread across the lease repayments, and will include a residual amount determined by the lender at the start of the contract.

At the end of the lease, you’ll have the option to purchase the asset and assume full ownership. If the asset is worth more than the residual, the business will profit from the purchase.

In summary:

  • Generally offers ownership at the end of the lease

  • Doesn’t require a deposit or security — other than the asset financed

  • Your equipment does not sit on your books as an asset or liability

  • Immediate access to your business equipment once purchased

  • Repayments may be tax-deductible

  • Responsible for maintenance and running costs

  • Responsible for repairs and damage

  • Rental payments can be tailored over the term of the agreement

  • Fixed repayments over a set term

  • Residual value of the asset is calculated upfront

How much do you need for your business?

Here are the most popular questions people are asking about a finance lease:

What is a finance lease and operating lease?

A finance lease and operating lease are both used to acquire business assets.

Generally, a finance lease will allow full ownership over high-value assets at the end of the lease, while an operating lease is used for low-value assets such as laptops, where the borrower does not plan to own the asset at the end of the term.

What is a finance lease on a car?

A finance lease for a car is a form of business vehicle finance.

While it may be a suitable option for some, there are generally loans and lease options available to businesses which provide superior benefits to a finance lease. The most popular example is a Chattel Mortgage.

How can I calculate the cost of a finance lease?

You can use an equipment finance calculator to quickly estimate the cost of various types of leases and loans for business equipment. Keep in mind that rates and terms will vary both between lenders, and borrower profiles.

What is a finance lease good for?

Generally, a finance lease is most suitable for high-value assets which a business plans to own at the end of the lease period.

A finance lease is increasingly popular when considering medical practice fit-outs, as it allows professionals to finance valuable equipment and machinery without needing to pay for the asset upfront.