Key Takeaways
- If your credit score falls below 550–600, most banks and mainstream lenders will likely consider it “poor” and may knock back your application.
- But all is not lost—there are specialist lenders who offer bad credit equipment finance to help businesses get the gear they need.
- This type of finance works because the loan is usually secured by the equipment itself, meaning lenders focus more on your ability to repay rather than your credit history.
- There are several finance options out there—from chattel mortgages to equipment leases—even if your credit isn’t squeaky clean.
- While the interest rates for bad credit equipment loans can be on the higher side, working with finance experts like Broker.com.au can help you find the most competitive deal for your situation.
- Once you’re approved, staying on top of repayments and keeping an eye on your budget can not only ease financial pressure but also improve your credit rating over time.
Running a business often means investing in the right tools—whether that’s machinery, vehicles, or IT. If your credit rating has taken a hit, it might feel like you’re hitting a brick wall with lenders. The good news? Bad credit equipment loans are available across Australia, even in big cities like Sydney. Below, we’ll walk you through how these loans work, the types of finance available, and how to boost your odds of getting approved.
🟧 Apply here for help securing equipment finance.
What Does a Bad Credit Score Mean for Equipment Finance?
In Australia, credit scores range from 0 to 1,200. Anything below 550–600 is generally flagged as “bad” by lenders. This might be due to missed repayments, loan defaults, unpaid invoices, or just messy financial records.
Traditional lenders tend to shy away from applicants with low scores because they see them as risky. But that doesn’t mean the door is shut. There are alternative and private lenders across Australia who cater specifically to businesses with credit challenges.
When it comes to equipment finance, having bad credit may limit your lender options, but it doesn’t rule you out. Since these loans are secured against the equipment itself, lenders often see them as less risky compared to unsecured loans.
What is Bad Credit Equipment Finance?
Bad credit equipment finance refers to loans or leasing deals tailored for businesses with poor credit. Major banks might reject your application, but non-bank lenders can step in with solutions that get you the machinery or tech you need to keep operations rolling.
These loans tend to come with higher interest rates, but they also offer flexible repayment terms and greater approval chances. Plus, they can be a good stepping stone for improving your business’s credit standing.
Why Look at Equipment Loans with Bad Credit?
- Get the Gear You Need – From earthmovers to laptops, this finance can help you secure critical tools to stay productive.
- Fix Up Your Credit – Repaying your loan on time can help rebuild your business’s credit score.
- Flexible Solutions – Many lenders offering these products understand that past financial setbacks happen, and they tailor options to suit.
Common Types of Business Equipment Finance
Even if your credit history isn’t spotless, you’ve got options:
🔑 Chattel Mortgage
This is a secured loan where the equipment acts as collateral. You own the gear from day one, but the lender holds a mortgage over it until the loan’s paid off.
🖥 Equipment Leasing
With leasing, you don’t own the equipment—yet. You pay to use it for a fixed term, and at the end, you can return it, upgrade, or buy it outright. Great if you need to stay up-to-date with tech.
⚙️ Hire Purchase
This works like a lease with the intention to buy. You make regular payments and take full ownership at the end—usually after a final “balloon” payment.
What About Interest Rates?
Because of the increased risk for lenders, bad credit equipment loans usually have higher interest rates. What you pay depends on a few factors, including:
- Your credit history
- Your current financials
- The type of equipment
- The loan term
- The lender’s risk appetite
Not sure what your repayments might look like? Try our equipment finance calculator for an estimate.
Tips to Manage Your Loan Responsibly
Once you’re approved, here’s how to stay in control and make the most of your equipment finance:
- Stick to Your Budget – Make sure loan repayments are included in your regular cash flow.
- Pay On Time – This builds trust with your lender and boosts your credit score.
- Track Your Credit – Keep tabs on your business credit report and fix any errors you spot.
- Talk to the Pros – If you hit a rough patch financially, don’t ignore it. Reach out to Broker.com.au for help with refinancing or restructuring.
Wrapping It Up
Bad credit doesn’t have to stop your business from accessing the equipment it needs to thrive. Whether you’re based in Sydney or anywhere else in Australia, there are lenders who understand the ups and downs of running a business.
By knowing your finance options, working with specialists, and managing your loan well, you can get the tools to grow—and rebuild your credit along the way.
🟧 Apply here if you’d like help getting started with bad credit equipment finance.
