What Credit Score Do I Need for Equipment Finance?
Most Australian equipment lenders look for an Equifax score above 500 to 600, but options exist for lower scores depending on your ABN history and cash flow.
What credit score is required?
In Australia, there is no single universal credit score required to secure equipment finance. Most traditional bank lenders prefer a commercial credit score of 600 or higher on Equifax. However, non-bank and specialized asset finance lenders frequently approve business borrowers with scores between 400 and 600, provided the business demonstrates stable revenue.
Because the machinery, vehicle, or equipment serves as underlying security, lenders view asset finance as lower risk than unsecured funding. During credit assessment, lenders evaluate your overall credit file alongside your ABN registration tenure, GST registration, trading history, and recent bank statements to confirm serviceability.
A strong credit score combined with an established ABN often unlocks streamlined low doc policies, requiring minimal financial paperwork. If your credit file shows past defaults or late payments, specialist lenders can still offer funding, though they may request a higher deposit, adjust loan-to-value ratios, or modify the balloon payment.
Navigating various lender guidelines and credit requirements across the market can be challenging. A Lonix broker can analyse your credit file, compare suitable options across an extensive lender panel, and properly structure your equipment loan to match your business's financial situation.
Related questions
- Can I get equipment finance with bad credit?
- Yes, many specialist Australian lenders offer bad credit equipment finance. They place greater emphasis on the value of the asset and your business's current bank statement cash flow rather than past credit defaults.
- Will applying for equipment finance impact my credit score?
- Submitting a formal loan application places an inquiry on your credit file, which can temporarily reduce your score. Seeking preliminary quotes before formal submission helps protect your credit history.
- What is considered a good commercial credit score in Australia?
- On the Equifax scale, a business credit score between 625 and 724 is considered good, while anything above 725 is excellent. Higher scores generally unlock lower interest rates and simplified low doc pathways.
- Do lenders check my personal credit score for business equipment finance?
- Yes, for sole traders, partnerships, and small proprietary companies, lenders usually check the personal credit files of all directors and guarantors alongside the company's ABN profile.