The weeks either side of 30 June are the busiest of the year for equipment finance, and for good reason. The turn of the financial year is when tax planning, asset decisions, and cash flow strategy all land on the desk at once. Whether you are squeezing a final purchase into this financial year or planning your equipment needs for the next one, the decisions you make now can have a real impact on your tax position and your working capital.
Here is what small business owners should have on their radar right now.
The instant asset write-off: timing is everything
For the 2025-26 financial year, eligible small businesses with turnover under $10 million can immediately deduct the full cost of eligible assets costing less than $20,000, rather than depreciating them over several years. The threshold applies per asset, so multiple qualifying purchases can each be written off in the same year.
The detail that catches business owners out every June is this: the asset must be first used or installed ready for use by 30 June. An invoice dated 28 June is not enough if the equipment does not arrive until July. If you are planning a purchase to claim this financial year, allow for delivery and installation lead times, and keep records of when the asset was actually ready for use.
There is also some welcome news on the horizon. In the May Budget, the Government announced its intention to make the $20,000 threshold permanent from 1 July 2026. That measure is not yet law, so it pays to keep an eye on it, but it does mean there is no need to rush a purchase that is not genuinely ready. The right asset at the right time will generally beat a hurried buy made purely for a deduction. As always, speak to your accountant about how the write-off applies to your specific circumstances.
Financing the purchase: keep your cash working
Even when a deduction is available, paying cash for equipment is not always the smartest move. Tying up working capital in a vehicle, machine, or fit-out can leave the business short when an opportunity or a quiet month arrives. Equipment finance lets you spread the cost over the useful life of the asset while preserving cash for the things that only cash can do.
The main structures we arrange for clients include:
Chattel mortgage: the business owns the asset from day one, with the loan secured against it. This is the most common structure and typically suits businesses that want ownership and the associated tax treatment.
Equipment leases: the financier owns the asset and the business pays for its use. Leasing can suit assets that date quickly or businesses that prefer to upgrade on a regular cycle.
Hire purchase: the business pays the asset off over an agreed term and takes ownership at the end.
Each structure has different tax, GST, and balance sheet implications, and the right answer depends on your situation. The good news is that lenders compete hard in this space, and well-presented applications with clean financials are being approved quickly, often with minimal documentation for established businesses.
The new financial year is for planning, not just paperwork
Once 30 June passes, the temptation is to file everything away and move on. But July is the best month of the year to plan equipment and lending needs properly. Your financials are fresh, your accountant has a current picture of the business, and you have a full twelve months to time purchases strategically rather than scrambling in June.
A few questions worth asking as the new financial year begins:
- What equipment, vehicles, or technology will the business need in the next twelve months?
- Are existing finance facilities still competitive, or were they set up years ago and never reviewed?
- Is there a balloon payment or lease expiry coming up that needs a refinance or upgrade decision?
- Could consolidating older facilities free up cash flow or simplify repayments?
Talk to us before you commit
The difference between a good equipment finance outcome and an average one usually comes down to structure and preparation. Bringing us in before you sign a purchase order means we can line up the right lender, the right structure, and the right timing for your tax position.
If your business is weighing up an equipment purchase, a vehicle upgrade, or a review of existing facilities, I would love to hear from you.
enquiries@thebrokerage.au | 0451 973 662 | thebrokerage.au
The information in this article is general in nature and does not constitute financial, tax, or legal advice. Eligibility for tax concessions including the instant asset write-off depends on your individual circumstances. You should consult a qualified accountant or tax adviser before making any asset or finance decisions.