Finance question
What is a line of credit for equipment purchases?
A line of credit is a revolving limit you can draw from, repay and draw again, rather than a single loan for one asset. For equipment, most operators are better served by a secured asset loan, because it prices against the machine and keeps repayments matched to the asset's life. A line of credit suits flexible, smaller or fast-moving spend, and we help you pick the right one.
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The short answer
A revolving limit, not a one-asset loan
A line of credit works like a reusable pool of funds. You have an approved limit, you draw what you need, you pay interest on what you use, and as you repay it the room becomes available again. It is flexible by design, which makes it handy for a steady stream of smaller purchases or spend that does not sit neatly on one big machine.
For a single sizeable asset, a secured equipment loan usually wins. Because the machine or vehicle secures the loan, the pricing is sharper and the term is matched to the years the asset earns, up to $500,000. A revolving line is rarely secured against a specific asset, so it tends to price higher and is better kept for flexibility than for a major purchase.
The honest answer is that it depends on how you buy. A workshop topping up tooling and small gear across the year may value a line of credit, while an operator buying a $120,000 machine is better on a secured loan. Across 40+ lenders we look at your buying pattern and point you to the structure that actually costs you less.
Do you qualify?
When a line of credit fits.
Frequent small spend
A stream of smaller purchases rather than one big asset.
You want flexibility
Draw, repay and redraw as your needs move through the year.
One big asset instead
For a major machine, a secured loan usually prices better.
An established ABN
Trading history helps a lender set a workable limit.
Why the structure should match the spend
Flexibility has a cost
A revolving line trades sharper pricing for the freedom to redraw.
Secured is sharper
For a specific asset, security in the machine usually beats a line on price.
Right tool, right job
We match small, ongoing spend to a line and big assets to a secured loan.
A real example
A cabinet maker keeps buying blades, tooling and small gear through the year, none of it big enough for its own loan. A line of credit covers the steady spend and redraws as it is repaid. When a $95,000 CNC machine comes up, that goes on a separate secured loan for the better rate. Illustrative only.
Common questions
Frequently asked questions
How is a line of credit different to an equipment loan?
A loan funds one asset over a set term. A line of credit is a revolving limit you draw, repay and redraw, better suited to flexible, ongoing spend.
Is a line of credit cheaper than a secured loan?
Usually not for a specific asset. A revolving line is rarely secured against the machine, so a secured equipment loan tends to price better.
When should I use a line of credit?
When you make frequent smaller purchases or want flexibility across the year, rather than funding one major asset.
Can I use both?
Yes. Many businesses run a line for small ongoing spend and take separate secured loans for major assets to get the better rate.