Equipment finance vs paying cash

It is tempting to pay cash for a new truck or machine. No repayments, no paperwork, no interest. But the cash used to buy equipment is the same cash that pays wages in a quiet month. The real question is not whether finance costs money, but whether your cash is more useful somewhere else.

Side by side

	Paying cash	Equipment finance
Finance cost	None	Yes, over the term
Effect on cash buffer	Reduced immediately	Largely preserved
Ownership	Immediate	Depends on structure
Flexibility later	Cash already spent	Cash available for other needs
Paperwork	Minimal	Application and security

When paying cash makes sense

• You have well over the cash you need for normal swings, tax and a buffer.
• The asset is small relative to the business.
• There is no better use for the cash, such as paying down more expensive debt.

When financing makes sense

• Paying cash would leave the business thin heading into a quiet period or a tax bill.
• The asset will generate income over several years, so spreading its cost matches costs to revenue.
• The cash has a better use, like stock that turns over quickly or a supplier discount.

Prefer to talk it through? Start with the 60-second enquiry so the first call is about options, not paperwork. No credit check at this stage.

The hidden cost of running cash too low

The most expensive outcome is often paying cash for equipment and then needing emergency funding a month later for wages or a BAS bill. Emergency borrowing is rarely on the best terms. Before deciding, run the cash runway calculator with and without the purchase to see how close to the edge the business would sit.

Tax considerations

Depreciation, GST credits and the instant asset write-off can all affect the after-tax cost. For eligible businesses with turnover under $10 million, the instant asset write-off threshold is $20,000 per asset and has been made permanent from 1 July 2026. Whether you pay cash or finance, the timing of purchase and first use matters, so speak with your accountant. Our instant asset write-off guide covers the basics.

A balanced approach

Many owners put down a modest deposit and finance the rest, keeping a healthy buffer while limiting finance costs. Read more on equipment finance structures, including chattel mortgages and leases.

An illustrative example

An earthmoving contractor has $180,000 in the bank and wants a $140,000 excavator. Paying cash would leave $40,000, about three weeks of wages and fuel, with a quarterly BAS due in five weeks. Financing most of the machine over five years keeps more than $150,000 in the account, so the BAS, a slow-paying client and a wet month can all be absorbed without emergency borrowing. The finance cost is real, but so is the cost of being caught short.

In a nutshell

• Cash avoids finance costs but drains working capital
• Finance keeps cash free and matches cost to the asset’s life
• Tax treatment differs, so ask your accountant
• Never leave the business without a cash buffer

How the process runs

One enquiry, one team, one clear answer. That is the whole approach. We read what you send, call you, ask for the documents that matter and lay out the options in plain English with the total cost attached. Your details are not shopped around, and your credit file is only checked if you choose to accept an offer. If the answer is no, you will hear it quickly and with a reason, so you can plan your next move.

Before you send the enquiry

You do not need a folder of financial statements to start an enquiry. For most unsecured and property-secured funding, these few items cover the essentials:

• Photo ID for each director or owner.
• Access to your business bank account for a secure statement link.
• Your latest BAS, if it is handy.
• Details of existing finance, including any daily or weekly repayments.
• For property-secured funding, the property address and current loan balance.

Getting the enquiry right

Late surprises are what slow funding down. A second property owner nobody mentioned, turnover that is lower in the statements than on the form, an amount that doubles after the first call: each one sends the assessment back to the start. If you tell us the full story at the beginning, even the awkward parts, the file only has to be worked through once.

Get a straight answer

The next step is simple: send us the basics and a real person will call. There is no credit check when you submit it, and nothing goes to another lender without you knowing. Fill the form in accurately, especially the amount and your monthly revenue, because those two answers decide which option fits and how quickly it can move.