The cost of crane finance and how it works

Cranes cost anywhere from $150,000 for a smaller mobile unit to well over $1 million for a tower crane or specialised lifting equipment.

Most self-employed operators choose to finance rather than pay cash upfront, but the structure you pick affects your monthly outgoings, your tax position, and how much capital you tie up in one asset. A chattel mortgage suits most buyers because it offers ownership from day one, full tax deductions on interest, and the ability to claim depreciation on the equipment itself.

Chattel Mortgage: Ownership With Tax Benefits

A chattel mortgage gives you immediate ownership of the crane while the lender holds security over it until the loan is repaid. You claim the full GST credit upfront if you're registered, deduct the interest portion of your repayments, and write off depreciation annually through your business accounts.

Consider a buyer who purchases a $400,000 mobile crane under a chattel mortgage with a 20% deposit and a five-year term. The loan amount sits at $320,000, with fixed monthly repayments calculated on the outstanding balance. At the end of the term, they've paid off the crane entirely and own the asset outright. During those five years, they've claimed depreciation each year and deducted the interest component of every repayment, reducing their taxable income.

If you structure the loan with a balloon payment at the end, your monthly repayments drop because you're deferring part of the principal. A 30% balloon on that same $320,000 loan means you're financing $224,000 over the term and settling the remaining $96,000 at the end. That lower monthly cost helps when you're managing cashflow across multiple jobs, but you need a plan to refinance or pay out that balloon when it falls due.

How Commercial Equipment Finance Differs From a Standard Loan

Commercial equipment finance is an asset-based product, which means the crane itself acts as collateral. Lenders price the loan based on the equipment's resale value, its expected lifespan, and how easily they could recover their money if the loan defaults. That makes it different from an unsecured business loan, where the lender relies on your trading history and credit profile alone.

Because the crane secures the loan, you'll often access lower interest rates than you would with unsecured finance. The lender will want proof of income if you're self-employed, typically your last two years of tax returns and recent business activity statements. Some lenders also ask for a deposit, usually between 10% and 30%, depending on the age and type of crane.

Finance Lease vs Hire Purchase: When Ownership Timing Matters

A finance lease keeps the equipment off your balance sheet because you don't own it during the life of the lease. You make regular payments, claim the full amount as a tax deduction, and either return the crane, refinance the residual, or purchase it outright at the end. This structure suits businesses that want to preserve working capital and avoid tying up equity in depreciating machinery.

Hire purchase works more like a chattel mortgage but with slightly different tax treatment. You take ownership at the end of the term after paying off the agreed amount, and you claim depreciation throughout. Monthly repayments under hire purchase are typically structured without a large balloon, which means you pay more each month but finish the term with the asset fully paid off.

In a scenario where you're upgrading your fleet every few years, a finance lease lets you hand back the crane at the end of the term and move into newer equipment without selling the old unit yourself. If you plan to run the crane for a decade or more, a chattel mortgage or hire purchase makes more sense because you're building equity and claiming depreciation on an asset you'll keep.

Structuring the Loan Around Your Cashflow

Fixed monthly repayments give you certainty, particularly when quoting on long-term contracts where you need to lock in your operating costs. Most lenders offer terms between three and seven years for plant and machinery finance, with the option to include a balloon payment to bring down the monthly amount.

That balloon can sit anywhere from 10% to 40% of the total loan amount, depending on the lender and the equipment type. A higher balloon reduces your monthly commitment but increases the lump sum you need to settle at the end. If you refinance that balloon into a new term, you're extending the total cost of the crane and paying more interest over time.

Some operators structure their repayments to align with major contract milestones. If you know a job will generate $50,000 in revenue at completion, you might time a balloon payment to fall shortly after that invoice clears. That approach only works if the contract timing is reliable and you're not left carrying a balloon through a quiet period.

GST Treatment and How It Affects Your Upfront Cost

If you're registered for GST, you can claim the tax component back in your next business activity statement under most finance structures. On a $440,000 crane including GST, that's a $40,000 credit you'll recover, which brings the net cost down to $400,000. Under a chattel mortgage, you claim that GST upfront. Under a finance lease, you claim GST on each repayment as you make it.

That timing difference matters if you're managing cashflow month to month. A chattel mortgage gives you the full GST credit in the first quarter, which you can use to cover your deposit or reduce the loan amount. A finance lease spreads the GST claim across the term, which smooths your cashflow but delays the benefit.

When Vendor Finance or Dealer Finance Might Apply

Some crane suppliers offer vendor finance directly, either through their own lending arm or a partnership with a finance company. The application process is often faster because the supplier already has your business details and knows the equipment specifications. Rates can be higher than you'd get by arranging your own finance, but the convenience might suit you if you're buying off the lot and need to get the crane on site within days.

Dealer finance works similarly. The dealership introduces you to a lender, handles the paperwork, and gets the loan approved as part of the sale. You're not locked into that arrangement, and in our experience, most buyers who compare a dealer's offer against a broker's access to multiple lenders will find a lower interest rate or better terms by shopping around.

If you're looking to finance a crane alongside other construction equipment finance like excavators or trucks, bundling the loans under one facility can reduce your admin and sometimes improve your rate. That only works if the lender is comfortable with the combined loan amount and you're not overextending your serviceability.

Call one of our team or book an appointment at a time that works for you. We'll compare loan structures, run the numbers on different deposit and balloon combinations, and show you what's available across lenders who finance cranes and heavy machinery.

Frequently Asked Questions