Yes, farm equipment can be financed. Most buyers use a chattel mortgage, a finance lease or a business loan, and the machine itself usually secures the finance. What changes from one lender to the next is how closely they look at the machine, at your farm business and at how your income arrives across the season.
loan-o is a Brisbane finance broker based in Milton. We arrange equipment finance for farms and rural businesses, including tractors, harvesters, headers, sprayers, GPS technology and implements, comparing options from a panel of 50+ bank and non-bank lenders. This guide explains how it works so you can ask better questions, whoever you finance with.
What lenders look at: the machine and your farm
- The machine: make, model, year, hours, condition and the price against what it is worth. For used machinery, many lenders also care about its age at the end of the term, not just today.
- Your business: how long you have held your ABN and farmed, your income across seasons, your credit file and your other commitments.
- The deal: the deposit, the term and any balloon (a lump sum left owing at the end).
- The seller: a dealer, an auction or a private seller, since each carries different paperwork and risks.
Tractors, headers, sprayers and implements
Farm purchases are often a main machine plus attachments, such as a tractor with a loader, a header with a front, or a sprayer with GPS guidance. That can mean several items on one or more invoices. Lenders may want each item listed, and some will finance the whole package together while others treat the pieces differently. Ask early what can be included, and keep the invoices itemised.
New or used, dealer, auction or private sale
Used machinery can be financed, but expect more checks. Get an independent inspection, ask for the service history and hours in writing, and search the PPSR to confirm no finance is owing on the machine. For an auction or private sale, lenders often ask for proof of ownership as well. Our guide to financing a used vehicle or equipment covers these checks in more detail.
Chattel mortgage, finance lease or balloon?
- Chattel mortgage: you own the machine from day one and the lender takes security over it until the loan is repaid. It is a common choice for farm equipment.
- Finance lease: the lender owns the machine during the term and you make lease payments. What happens at the end depends on the agreement.
- Balloon: a lump sum left owing at the end of the term. It lowers regular repayments, but you still have to pay or refinance it. See what a balloon payment means.
Tax and GST treatment differs between structures, so confirm it with your accountant. See chattel mortgage vs lease for the comparison, and instant asset write-off and equipment finance for how write-off rules can interact with a purchase.
Match repayments to when the farm gets paid
Farm income is lumpy: it can land at harvest, at sale or after a season turns. A flat monthly repayment can squeeze the months in between. Before you commit, work out when money actually arrives, ask whether a lender can structure repayments around it, and test the numbers with the finance calculator. Our guide on how seasonal cash flow shapes the right finance goes further.
What to have ready
- The machine and any attachments: make, model, year, hours, plus the quote or itemised invoices.
- Your ABN, how long you have farmed and what you produce.
- Recent business bank statements or BAS, and income records across more than one season where you have them.
- Any deposit and any trade-in.
- Details of other finance you already have, including any farm debt.
Questions to ask before you sign
- Why this lender and this structure for my situation?
- What will the repayments be, including any balloon, and what is the total I will pay?
- Can the repayments be set around my harvest or sale income?
- What fees apply, now and at the end of the term?
- What happens if I want to pay it out early or sell the machine?
The takeaway
Farm machinery is a financeable asset, but the lender judges the machine and your farm business together, and the timing of your income matters as much as the size of it. Know what you are buying, line up your paperwork and compare the total cost, not just the repayment. loan-o can review any offer you already have for free; start a free finance check with no credit check to enquire, or see our equipment finance page.
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Finance is subject to lender approval, lending criteria, terms, conditions, fees and charges. The information in this article is general and does not take into account your personal or business needs. It should not be treated as personal financial, tax, legal or credit advice.
Frequently asked questions.
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Yes, tractors, headers, sprayers, balers, GPS and precision-farming gear and other implements are commonly financed. The machine usually secures the finance, and lenders look at the machine, your ABN and trading history, your credit file, any deposit and how your farm earns its income. Approval is never guaranteed and criteria differ between lenders.
The common structures are a chattel mortgage and a finance lease. A business loan or a line of credit can also be used. Which one suits you depends on how long you plan to keep the machine, how you want to handle tax and GST, and how much you want to owe at the end of the term, so check the treatment with your accountant.
Sometimes. Some lenders will structure repayments around when income lands, for example larger payments after harvest or sale and smaller ones in between. Not every lender offers it, and it depends on your income history, so ask for it upfront rather than assuming.
Often, yes, depending on the machine, the seller and the lender. Lenders may look at the machine's age at the end of the term, its hours and condition and the price against market value. For a private sale or auction they often ask for extra checks, such as proof of ownership and a search of the PPSR to confirm no finance is owing.
Many lenders consider smaller operators, sole traders and family farms. They generally look at how long you have held your ABN and farmed, your credit file, the machine, any deposit and your income across seasons. Options can be narrower after a poor season or for a newer business.
A balloon lowers your regular repayments, but you still owe the lump sum at the end of the term and need to pay it, refinance it or sell the machine to cover it. Whether it makes sense depends on what the machine may be worth then and how long you plan to keep it. A broker can show how it changes the total cost.
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