How to Use Small Business Loans to Invest in Equipment and Machinery

Your jobs are increasing, but your old equipment is slowing everything down. A new machine could double your output or help you win bigger contracts — but you don’t have $150,000 sitting in the bank. This is where a small business loan or a dedicated asset finance facility becomes a strategic investment for businesses across Australia.

If you’re exploring funding options, Broc Finance can help you compare a general-purpose loan with asset-based products through its asset finance solutions.

Why Investing in the Right Equipment Matters for Small Businesses

Upgrading your equipment is more than replacing worn tools — it strengthens production, speed, quality and reliability. Businesses across construction, trades, manufacturing, hospitality, logistics and warehousing rely on machinery to deliver consistent results. Better equipment means:

• Higher productivity
• Less downtime and fewer breakdowns
• Improved safety and compliance
• Ability to win larger contracts
• Better customer outcomes

For many SMEs, investing in the right equipment is a direct path to more revenue and stronger capacity.

When a Small Business Loan Can Be Used for Equipment and Machinery

You can use a small business loan for equipment when you need flexibility or mixed-purpose funding. It’s effective when you need to cover:

• Part machinery, part working capital
• Smaller equipment purchases
• Fast upgrades without asset valuations
• Seasonal equipment needs

This approach works well for trades tools, portable machinery, small kitchen equipment or business-critical tools. If you want an overview of asset lending and how it compares, Broc’s guide on asset finance for businesses is a helpful starting point.

When Dedicated Equipment Finance Might Be Better

Larger, long-life assets are usually better funded through specialised products such as equipment finance, which often offers:

• Longer terms matched to the asset’s useful life
• Potentially sharper interest rates
• Ownership structure options (chattel mortgage, hire purchase)
• Better alignment with depreciation and tax strategy (depending on your accountant)

Industries investing in high-value machinery often compare options such as plant and machinery finance, business vehicle finance, and specialised solutions like forklift finance or solar equipment finance. Transport operators often consider truck finance for reliability upgrades.

Small Business Loan vs Equipment Finance: Which Is Better?

If you're comparing equipment finance vs a business loan, here’s how they typically differ:

Approval Speed

Small business loans generally approve faster because they don’t require asset valuations. Equipment finance may require more checks depending on asset type.

Security

A general loan may be unsecured or require only a personal guarantee. Asset finance uses the equipment itself as collateral.

Flexibility

Small business loans allow broader use of funds. Equipment finance is tied strictly to the asset purchase.

Repayment Terms

Equipment finance aligns the term with the asset’s lifespan. Small business loans run shorter terms based on cash flow.

For a deeper comparison, Broc Finance explains the differences in its guide on the best type of equipment finance.

Smart Ways to Use Finance for Equipment and Machinery

Manufacturing and Construction Machinery

Upgrading production machinery, fabrication tools or heavy equipment reduces downtime and increases output. Broc’s case study on plant and machinery finance shows how financing helped a contractor revive operations and take on bigger work.

Vehicles and Transport Fleets

Service businesses often invest in utes, vans or trucks through business vehicle finance or truck finance. Broc’s article on business vehicle finance FAQs breaks down key terms.

Hospitality and Commercial Kitchen Equipment

Restaurants and cafés use finance to upgrade refrigeration, ovens, kitchen equipment and POS systems.

Solar and Energy-Efficient Technology

Many SMEs invest in greener operations using solar equipment finance to reduce long-term utility costs.

Warehousing & Materials Handling

Warehouse operations often fund pallet movers, forklifts and related tools through forklift finance. Used assets can also be funded through used equipment finance.

Estimating ROI on Equipment Funded by a Loan

Before choosing a loan structure, estimate whether the equipment will “pay for itself.” Calculate:

• Additional revenue generated
• Labour hours saved via automation or speed
• Reduced downtime from older machinery
• Operational savings (fuel, maintenance, warranty)
• Payback period — how long until positive ROI

Even modest efficiency gains often exceed weekly repayments. You don’t need to understand every term like chattel mortgage, balloon, lease or hire purchase — Broc Finance talks through every option in plain English.

Common Mistakes When Financing Equipment

• Choosing an asset loan with a term longer than the equipment’s life
• Buying gear without calculating real ROI
• Ignoring available tax advantages
• Using a general loan when asset finance would be cheaper
• Not comparing lenders or product structures

How Broc Finance Helps You Choose the Right Facility

Broc Finance compares multiple lenders to ensure your equipment upgrade is backed by the right product structure — whether that’s a small business loan, equipment finance, plant and machinery finance, vehicle finance, or another asset facility. Broc assesses:

• Your cash flow and industry
• The asset type
• Timeline and urgency
• ROI expectations
• Preferred ownership structure

Broc Finance helps you finance equipment in a way that’s sustainable and aligned with your long-term goals.

FAQs: Financing Equipment and Machinery

Can I use a small business loan to buy equipment?

Yes. Small business loans are often used for both equipment purchases and broader operational needs.

Is equipment finance or a small business loan better?

Equipment finance is usually better for high-value, long-life assets. A small business loan is better when you need flexibility or mixed-purpose funding.

Do I need to offer security?

Not always. Many SMEs choose unsecured loans for smaller equipment purchases.

Can I finance used equipment?

Yes. Many lenders support used equipment finance.

How do I finance machinery for a small business?

Most SMEs compare small business loans with machinery finance, depending on asset value, timing, and ROI expectations.

Ready to Upgrade Your Equipment and Accelerate Your Growth?

The right equipment can lift your output, profitability and efficiency — and the right finance structure makes it achievable without draining your cash reserves. Broc Finance helps you compare options, structure repayments and align your upgrade with a smart, sustainable funding strategy.

Start exploring your options. Apply now or Contact Broc Finance today.