Funding plant, machinery, kitchen fit-out, and shop-floor equipment for NZ businesses. The structures (chattel mortgage, hire purchase, lease, term loan), indicative weekly costs, and three borrower scenarios.
Last reviewed 5 May 2026
Indicative repayment
Weekly
$376/week
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
5 years at 11.00%. Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
Indicative only. Why we say this
Quick answer
What it is
Equipment finance is borrowing used to fund the purchase of business plant, machinery, kitchen equipment, shop fit-out, computer hardware, or any other long-life productive asset. The structure-of-choice for most equipment purchases in NZ is asset finance because the asset itself acts as security and the structure attracts mainstream rate bands.
Where the asset is unconventional, second-hand from a private seller, or the borrower prefers an unsecured route, a short-term or medium-term unsecured loan is the alternative, with rates typically 3 to 8 percentage points above the asset-finance band. NZ businesses commonly use UDC Finance, Heartland Bank, Avanti Finance, MTF Finance, and the major-bank asset-finance arms.
The structure choice is typically driven by three factors: GST recovery timing, the depreciation-versus-rental treatment under the IRD framework, and the balance-sheet impact under the lessee or owner classification. The accountant conversation usually settles which sits cleanest for the specific trading position.
Typical amount
$10K to $1M+
Term
1 to 7 years
Security
Often the asset itself
Rate band
8% to 16% indicative
Common scenarios
01
A new cafe or restaurant fit-out (combi oven, dishwasher, fridges, prep benches) typically running $80K to $250K. A chattel mortgage or finance lease across 3 to 5 years matches the kitchen-equipment depreciation cycle.
02
A builder or earthmoving contractor buying a digger, scissor lift, or scaffolding inventory. PPSR-secured asset finance through UDC, Heartland, or specialist lenders fits.
03
CNC, packaging line, food processing equipment. Often $100K to $500K. Asset finance through specialist lenders at indicative 9% to 13%.
04
Vans, utes, light trucks for trades and services. Vehicle finance via MTF, UDC, Heartland, or major-bank asset-finance arms.
05
Computer, server, POS, or AV upgrade. Lease structures dominate this category because the asset depreciates fast.
06
Specialist trade equipment (salon chairs, gym equipment, dental chairs, veterinary kit). Asset finance with PPSR registration; lease commonly chosen where equipment turns over inside 5 years.
Structures
The business owns the asset from day one; the lender registers a security interest on PPSR. GST claimable in the next GST return.
The lender owns the asset until final payment; ownership transfers on settlement. Structurally similar to chattel mortgage with slightly different accounting and GST treatment.
The lender owns the asset; the business rents it. Operating leases keep the asset off the balance sheet; finance leases bring it on.
Decision matrix
| Feature | Chattel mortgage | Hire purchase | Finance lease | Operating lease |
|---|---|---|---|---|
| Long-life machinery (5 to 7 yr) | Best fit | Best fit | Works | Marginal |
| Hospitality kitchen fit-out | Best fit | Best fit | Best fit | Works |
| Commercial vehicle or fleet | Best fit | Best fit | Works | Best fit |
| Tech and IT refresh | Works | Works | Best fit | Best fit |
| Specialist or one-off equipment | Best fit | Works | Marginal | Marginal |
| Off-balance-sheet preference | No | No | Marginal | Best fit |
| Upfront GST claim preference | Best fit | Works | No | No |
Worked scenarios
Hospitality
A Cuba Street cafe owner upgrading the back-of-house: combi oven, two-deck commercial dishwasher, prep fridges, stainless benches. Total ex-GST cost $120,000.
Structure: chattel mortgage at indicative 11% p.a. across 5 years. The cafe claims $18,000 GST in the next GST return. Weekly repayment runs around $600.
Indicative figures
Construction
A Mt Wellington commercial builder buying a scissor lift ($55K ex-GST) and modular scaffolding inventory ($35K ex-GST). Total $90,000 ex-GST.
Structure: chattel mortgage at indicative 9.5% p.a. across 5 years. The builder claims $13,500 GST in the next GST return. Weekly repayment runs around $440.
Indicative figures
Manufacturing
A Sockburn-based engineering business replacing an aged CNC mill with a new 5-axis machine. Cost $280,000 ex-GST.
Structure: hire purchase at indicative 10% p.a. across 7 years. Weekly repayment runs around $1,080. The asset is owned by the lender during the term.
Indicative figures
Lenders to know
Best for plant, machinery, and rural equipment
Long-established NZ asset-finance specialist. Strong on plant, machinery, agriculture, and commercial vehicles.
Indicative rate band:8% to 13% p.a.
Read onBest for NZ-bank asset finance up to $500K
Registered NZ bank with a substantial asset-finance arm.
Indicative rate band:9% to 13% p.a.
Read onBest for commercial vehicle and fleet finance
NZ-owned vehicle-finance specialist. Strong dealer network.
Indicative rate band:9% to 14% p.a.
Read onBest for unsecured equipment-purpose loans
Our finance partner. Small Business Loan suits unsecured equipment-purpose lending.
Indicative rate band:12% to 22% p.a.
Read onWhen it goes wrong
Late or missed scheduled payments commonly trigger a lender check-in within the first cycle. Most NZ lenders work with the borrower on a payment plan.
What happens:Late fees apply ($20 to $100 per missed payment). Credit-file marks accumulate. Continued non-payment escalates to formal default review and PPSR enforcement.
After 60 to 90 days arrears and PPSR enforcement notice, the lender can repossess the asset. The asset is realised through trade auction or wholesale sale.
What happens:Asset is removed from the business. Trading is materially disrupted. Any shortfall is pursued under the personal guarantee.
Where the business fails, the asset-finance lender ranks ahead of unsecured creditors for the asset value via PPSR.
What happens:Asset is realised by the lender. PG enforcement creates personal liability for any shortfall. Personal credit files mark for 5 years.
Default on equipment finance is uncommon in our experience among established borrowers. NZ asset-finance lenders typically prefer payment plans and term extensions over repossession.
References
IRD depreciation rate framework for equipment-finance term matching.
GST treatment framing for chattel mortgage versus lease structures.
Where equipment-secured finance is registered.
NZ SME equipment-investment context.
NZ business asset-finance volume context.
FAQ
Equipment finance is borrowing used to fund the purchase of business plant, machinery, kitchen equipment, shop fit-out, computer hardware, or any other long-life productive asset. The dominant structures in NZ are chattel mortgage, hire purchase, and finance or operating lease.
Indicative amounts run $10,000 to over $1,000,000 across the NZ asset-finance market. UDC Finance, Heartland Bank, and the major-bank asset-finance arms compete for the larger end.
Indicative rates run 8% to 16% per annum across NZ equipment finance. Major banks and established asset-finance specialists price the lower band on clean applications with new equipment.
Borrowers prioritising upfront GST recovery and ownership of the asset commonly choose chattel mortgage; borrowers prioritising the rental tax treatment and balance-sheet simplicity sometimes choose finance lease. The accountant is the right person to confirm.
On a chattel mortgage, the GST on the equipment cost is typically claimable in the next GST return where the business is GST-registered, subject to the accountant's confirmation. On a finance or operating lease, GST is treated inside the rental.
Common terms run 1 to 7 years, ideally matched to the productive life of the asset. Hospitality kitchen equipment 3 to 5 years; manufacturing machinery 5 to 7 years; commercial vehicles 3 to 5 years.
Interest on equipment finance used for business purposes is generally deductible against business income in New Zealand, subject to the accountant's confirmation.
Standard documents are NZBN, business owner ID, last 6 months of business bank statements, the supplier invoice or quote, and equipment details.
First-year businesses face a harder application because trading history has not been demonstrated. Specialist asset-finance lenders sometimes write equipment finance for new businesses where the borrower has substantial industry experience.
On default, the lender enforces the PPSR security after the statutory notice period. The asset is repossessed and sold; proceeds apply to the loan balance, sale costs, and fees. Any shortfall is pursued under the personal guarantee.
Often yes, particularly after 12 to 24 months of clean repayments where the trading history has improved. Early-repayment fees on the existing loan are the main consideration.
Yes, several alternative lenders write unsecured short-term loans for equipment purposes. Rates are typically 3 to 8 percentage points above the asset-secured equivalent.
Related
Equipment finance
The structured loan-type page covering chattel mortgage, hire purchase, and lease in depth.
Read onAsset finance
The broader category that equipment finance sits inside.
Read onHeartland Bank
NZ-bank asset finance for plant, machinery, and equipment up to $500K.
Read onDental practice loans
Chair, suite, and CBCT imaging finance is the highest-ticket NZ healthcare equipment category.
Read onViticulture and vineyard loans
Tank, press, and crush-pad equipment finance against multi-year fruit-development timelines.
Read onDisclaimer
A business loan is a commitment that runs for months or years, and repayments come out of the same operating cash flow as everything else. Before committing, it is worth modelling the weekly and monthly cost against the business's working-capital position, which is what this site is built to help with. Borrowing at a level that stays comfortable through a quiet quarter, not just a strong one, is widely regarded as the safer frame.
What this site is
A calculator and information tool. Not a lender, not a broker, not a registered financial adviser. Nothing here is personalised financial advice.
What the figures show
Modelled estimates based on the inputs you enter. Not a quote. Not an offer of credit. Not a guarantee of approval, rate, or fees.
What the lender decides
Final rates, fees, and approval are set by the lender after a CCCFA-appropriate assessment of the applicant's circumstances and credit decision.
Commercial disclosure
Businessloans.org.nz earns a commission from Prospa when a visitor applies through this site and their application is approved. The commission is paid by Prospa, not by the borrower, and it does not influence the rate Prospa offers. Full disclosure on the partner page.
Tax, GST, and accountant framing
Tax-treatment statements (GST claim timing, interest deductibility, depreciation rates) are general in nature and subject to your accountant's confirmation on the specific business position. For material amounts, professional advice from a registered financial adviser or chartered accountant is widely regarded as the safer frame.
