Yes, sole traders can get equipment finance. Many lenders consider them, and the equipment itself usually secures the finance. What changes from one lender to the next is how much trading history they want, how they read your income and how much weight they give your personal credit file.
loan-o is a Brisbane finance broker based in Milton. We arrange equipment, vehicle and ute finance for sole traders and small businesses across South East Queensland and beyond, 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 for a sole trader
- Your ABN and trading history: how long you have held your ABN and traded in the same line of work.
- Your credit file: as a sole trader you and the business are the same legal person, so your personal file matters.
- Your income: bank statements, BAS if you are registered for GST, and tax returns or other records that show money coming in.
- The equipment: what it is, its age and condition, and the price against what it is worth.
- The deal: the deposit, the term and any balloon (a lump sum left owing at the end).
Showing your income
Sole trader income can be uneven and may be reduced on paper by deductions. Lenders may look at a mix of recent bank statements, BAS and tax returns to form a picture, and some are more flexible than others about which they accept. If your paperwork is thin, say so early rather than hoping it goes unnoticed. Our guide on getting finance-ready as a new business lists what to prepare.
New or used, dealer or private sale
Used equipment and vehicles can be financed, but expect more checks. Get an independent inspection where it makes sense, ask for the service history in writing, and search the PPSR to confirm no finance is owing. For a 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 asset from day one and the lender takes security over it until the loan is repaid. It is a common choice for tools, utes and equipment.
- Finance lease: the lender owns the asset 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.
If your credit history is not perfect
A past default or late payment does not always rule out finance, but it can narrow the options and raise the cost. Read our guide on business finance with a poor credit history before you apply in several places, since multiple applications can leave marks on your file.
Keep repayments realistic
As a sole trader you are personally responsible for the repayments, so test them against a slow month, not just a good one. Use the finance calculator to see the effect of the term and any balloon, and see how seasonal cash flow shapes the right finance if your income moves through the year.
What to have ready
- Your ABN, ID and how long you have traded.
- Recent business bank statements, BAS if registered for GST, and tax returns or other income records.
- The quote or invoice for the equipment, and any trade-in.
- Any deposit.
- Details of other finance you already have.
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?
- What fees apply, now and at the end of the term?
- What happens if I want to pay it out early or sell the asset?
- What will the lender need from me, and how long will it take?
The takeaway
Sole traders can be financed, but the lender judges your trading history, your income and your personal credit together. Line up your paperwork, be upfront about gaps 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.
Got a question about your own situation? Ask a specialist →
Yes, many lenders consider sole traders. They generally look at how long you have held your ABN and traded, your credit file, the equipment, any deposit and your cash flow. Approval is never guaranteed and criteria differ between lenders.
It varies by lender. Many want to see an ABN and some trading history, and a longer record usually widens your options. A newer business can still be considered, but the choice of lenders may be narrower and a deposit may help.
Commonly your ABN, ID, recent business bank statements, BAS if you are registered for GST, and tax returns or other income records. The equipment quote or invoice is needed too. Exactly what is asked for depends on the lender and the amount.
As a sole trader you and the business are the same legal person, so your personal credit file matters. Equipment finance is usually written as a business facility for a business purpose, and you are personally responsible for it. Ask which it is before you sign and check the tax treatment with your accountant.
Often, yes, depending on the asset, the seller and the lender. Lenders may look at its age at the end of the term, its condition and the price against market value. For a private sale they often ask for extra checks, such as proof of ownership and a search of the PPSR to confirm no finance is owing.
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 asset to cover it. Whether it makes sense depends on what the asset may be worth then and how steady your income is. A broker can show how it changes the total cost.
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