The RBA raised the cash rate to 4.10 per cent yesterday. If you run a business that relies on vehicles, equipment or machinery, that decision matters to you, and now is exactly the right time to make sure your finance strategy is working as hard as your business is.
I have been helping Australian businesses navigate asset finance for more than 25 years, and the questions I am fielding from clients right now are some of the most important I hear. Not because the market is in crisis, but because a lot is happening at once, and the businesses that understand their options tend to come out significantly ahead of those who do not.
Here is what I think every business owner should be thinking about.
Your cash is your most valuable business asset
Around 97.3 per cent of all businesses in Australia are small businesses, with fewer than 20 employees. The vast majority of them are managing cash flow as carefully as they are managing anything else in the business. And yet one of the most common mistakes I see is business owners using available cash to purchase equipment outright when finance would have served them far better.
Working capital is not just a nice thing to have. It is what lets you pay wages when a client is slow, take on a larger job than you could otherwise handle, and keep moving when something unexpected hits. The moment that cash is locked up in an asset, it stops being able to do any of those things for you.
Business cashflow remains the main driver behind a lot of funding requirements for Australian SMEs, with building, trade and construction businesses particularly affected because they are often required to make upfront payments for materials and supplies on projects with income not being realised until certain milestones during the build process. (Money.com.au)
Finance is not just for businesses that cannot afford to pay cash. It is often the smarter choice for businesses that absolutely can.
More Australian businesses are financing assets than ever before
If you have been on the fence about whether asset finance is the right move for your business, the data is worth paying attention to.
According to recent research, nearly nine in ten Australian businesses reported productivity gains of more than 10 per cent following upgrades to their vehicles, machinery and technology. Sixty-eight per cent of companies took up new asset finance arrangements in the past year alone, and vehicle and equipment financing jumped by 20 per cent in December 2025 compared to the same time the previous year. (CommBank)
In the three months to December 2025, Australian businesses invested just over $23 billion in equipment and machinery, a year-on-year increase of 9.4 per cent.
Businesses are not doing this despite the economic environment. They are doing it because the right finance structure lets them invest in growth without compromising cash flow.
The structure of your loan matters as much as the rate
With equipment finance rates currently ranging from around 7.49 per cent to 15 per cent per annum depending on the asset type, your credit profile and whether you are an asset-backed borrower, it is easy to focus entirely on the interest rate when you are comparing options. The rate matters, but it is only part of the picture.
The loan term, the repayment structure and the type of finance you choose can have just as much impact on how the arrangement actually performs for your business. A piece of earthmoving equipment that will generate income for fifteen years should be financed differently to IT hardware that may be obsolete in three. Getting this right from day one is one of the most practical things you can do, and it is one of the areas where an experienced broker genuinely earns their place in your corner.
There are also meaningful tax considerations to factor in. The instant asset write-off has been extended until 30 June 2026, allowing small businesses with an aggregated annual turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000 in the year of purchase, rather than depreciating them over time.
After this date, the threshold reverts to $1,000 unless the government legislates a further extension. If you are planning purchases before June 30, this is a conversation worth having with both your accountant and your broker sooner rather than later.
What the latest rate rise means for your business
The RBA increased the cash rate to 4.10 per cent at its March 2026 meeting, citing inflation that remains above the target range, with headline inflation sitting at 3.8 per cent for the twelve months to January 2026.
For business owners, a rising rate environment makes two things more important than they were twelve months ago. The first is reviewing any variable rate facilities you currently hold to make sure the structure still makes sense. The second is locking in fixed rate asset finance for upcoming purchases before conditions shift further.
This is not a reason to panic. It is a reason to be deliberate. The businesses that plan their finance strategy in an environment like this tend to be the ones who maintain the most flexibility when they need it most.
Going direct to your bank: what you need to understand
Many of my clients have solid relationships with their bank and that relationship has real value. What I do encourage is a clear understanding of how banks approach business lending.
The overwhelming majority of business loans in Australia are secured in some form, and the most common reason applications are declined is insufficient collateral or security. Banks typically take 21 to 35 days from application to funding, driven by extensive documentation requirements and manual assessment processes.
A bank is also working within its own lending criteria, which means it can only offer what it offers. An independent broker with access to a panel of lenders can match each asset type to the most suitable financier, which often means better terms, faster approval and a structure that actually fits how your business operates.
If you arranged your current lending facilities when your business was smaller or less established, it is worth asking whether the security you offered at the time still reflects where the business is today. In many cases it does not, and a review can shift the terms meaningfully in your favour.
Flexibility is a finance strategy
The businesses seeing the strongest outcomes from asset finance are the ones treating it as a strategic tool rather than a last resort.
When all of your lending sits with one institution, that institution has more influence over your terms and repayments than you might realise. Access to multiple lenders means you can choose the best option for each individual purchase and maintain the kind of flexibility that lets you move quickly when the right opportunity comes up.
The right team makes the difference
The business owners I see making the best long-term finance decisions are almost never doing it alone. Working with a broker alongside your accountant means the finance decisions and tax decisions are aligned. A good broker brings the lending knowledge, your accountant brings the tax and business structure expertise, and together they give you a complete picture.
If your broker and accountant have never spoken to each other, that is worth thinking about. The best outcomes come from people who are working together with the same goal.
Commercial finance should support your business growth, not add to the mental load of running it. If you are planning a vehicle or equipment purchase, thinking about an upgrade before June 30, or simply have not reviewed your current arrangements in a while, I am always happy to have a no-obligation conversation.
How does the RBA rate rise affect my equipment finance?
If you have existing fixed rate finance, your repayments will not change. If you have variable rate facilities, you may see those costs increase as lenders pass on the rate movement. For new finance arrangements, fixed rates on equipment loans are set by the lender based on their own cost of funds and your risk profile, so the impact varies. Now is a good time to review what you have and lock in fixed rates on upcoming purchases if it suits your situation.
What is the instant asset write-off and does my business qualify?
The instant asset write-off allows eligible small businesses to immediately deduct the full cost of qualifying assets under $20,000 in the year of purchase, rather than depreciating the asset over time. To qualify, your business needs an aggregated annual turnover of less than $10 million and the asset must be in use by 30 June 2026. The threshold drops back to $1,000 from 1 July 2026 unless the government extends it again. It is worth talking to your accountant about whether any planned purchases could be brought forward to take advantage of this before the window closes.
Should I use finance or pay cash for equipment?
In most cases, using finance and preserving your working capital is the smarter move, even if the cash is available. Working capital gives you flexibility to manage cash flow, take on larger jobs, pay staff and suppliers on time, and respond to opportunities. Once cash is spent on an asset, it cannot do any of those things. Finance allows the asset to start generating income while the cost is spread over time.
Can I use a broker if I already have a relationship with my bank?
Yes. Having an existing bank relationship does not mean you have to use that bank for every finance need. A broker can work across your full range of asset finance requirements and, in many cases, access terms that a single lender cannot offer. Many of my clients maintain their bank relationship while using broker-arranged finance for specific asset purchases.
What types of assets can you help finance?
I work across a wide range of business assets including cars, utes, trucks, trailers, earthmoving equipment, commercial machinery, IT equipment, food processing equipment, woodworking equipment and more. If it has a serial number and it is being used for business purposes, there is a good chance we can find a suitable finance option for it.
How long does the process take?
This varies depending on the lender, the asset and your business profile, but in most cases I can have a finance approval in place well within a week. For straightforward applications with strong documentation, it can be considerably faster. Speed is one of the genuine advantages of working with a broker who has established relationships with multiple lenders.
