Who this covers: landscapers and turf contractors, earthmoving and excavation operators, civil subcontractors, and the small fleets that work for builders and councils.
What lenders do differently
The home loan: how the income is read
Returns for two years with add-backs; machinery depreciation is the usual large add-back, and it is where a contractor's capacity is often understated. Seasonal income is averaged across the year.
Excavators, skid steers and tippers
Machinery finance is the core of the business: chattel mortgage or equipment loan over the machine, terms of three to seven years to match its working life, a balloon where the machine holds value, and GST claimed in the next BAS. New machines from dealers are financed with a quote; used machines from auction or private sale with a valuation or an inspection.
Trailers, tippers and the truck
Trucks over 4.5 tonnes are financed as commercial vehicles, often with a longer term; a tipper and a plant trailer are financed with the machine or separately. Low-doc approvals to about $150,000 per item for an established ABN; above that, financials and the contract pipeline.
Cash flow on civil work
Builders and councils pay on claims and 30 to 60 day terms. Invoice finance against approved claims, or an overdraft sized to a month of turnover, covers wages and fuel between payments.
Worth knowing before applying
Machinery payments are a business expense already in the return; a machine financed through the business keeps it off the home loan side; and a contract pipeline letter from a head contractor helps both the machinery and the home loan application.
The tools that fit
- Chattel mortgage calculator
- Business and asset finance
- Income annualisation calculator
- Working capital and overdraft calculator
- Equipment finance calculator
- What lenders ask for: checklists
Not sure whether the business needs an overdraft, or how big: the working capital calculator works it out from sales, payment terms and stock, with presets for a typical business like yours.
Policies on all of the above differ lender to lender and change without notice; the value of the conversation is knowing which lender's policy reads your payslip best on the day. Understanding how your income is read before you apply is what makes the application calm.