Short answer: Excavator finance is typically arranged through a chattel mortgage or similar asset finance structure, with the excavator itself used as security. Loan terms usually run 3 to 5 years, and eligibility depends on the machine’s age and value, the applicant’s credit history, and how the excavator will be used in the business.
Excavators are one of the more capital-intensive purchases a civil contractor, landscaper or earthmoving operator makes, and getting the finance structure right matters almost as much as choosing the right machine. This guide covers how excavator finance typically works, what affects approval, and what to weigh up between size classes, new and used equipment, and loan structures.
How does excavator finance typically work?
Most excavator purchases in Australia are financed through a chattel mortgage: the borrower owns the machine from settlement, the lender takes a registered security interest under the Personal Property Securities Register (PPSR), and repayments are made over an agreed term. This structure is popular with GST-registered businesses because GST on the purchase price can typically be claimed as an input tax credit upfront, and interest and depreciation may be deductible, subject to your accountant’s advice and current ATO rules.
Other structures exist, including operating leases and hire purchase, though chattel mortgages remain the most common for businesses that intend to keep and eventually own the machine outright. Lenders typically assess:
- The excavator’s age, hours and condition (for used machines)
- Purchase price relative to market value
- The applicant’s trading history, financials and credit profile
- Deposit or trade-in contribution, if any
Mini, midi or standard excavator: does size affect finance?
Excavators range from 1-2 tonne mini excavators used for landscaping and tight-access residential work, through 5-13 tonne midi excavators common on civil and construction sites, up to 20 tonne-plus standard excavators used for larger earthworks. Size itself doesn’t usually change the finance structure, but it does affect the numbers lenders are working with.
A mini excavator might be financed for $30,000-$60,000, while a large standard excavator can run well into six figures. Larger machines generally attract closer scrutiny of utilisation, since a lender wants confidence the asset will be generating revenue consistently enough to support the higher repayment. Long-reach and specialised attachments (rock breakers, augers, tilt buckets) may be financed alongside the base machine or separately, depending on the lender and how the deal is structured.
New vs used excavators: what changes for finance?
New excavators typically attract the longest available loan terms and the most straightforward approval process, since valuation and expected working life are well understood. Used excavators can still be financed readily, but lenders usually apply closer attention to age, hours and remaining working life, and may cap the loan term so it doesn’t extend beyond the machine’s realistic useful life.
A private sale (as opposed to a dealer sale) can sometimes complicate financing slightly, since lenders may want an independent valuation or condition report before approving. Buying through an established dealer with service history on hand tends to streamline the process. TYG’s broader comparison of earthmoving equipment finance covers how this plays out across the wider category, not just excavators.
What repayment structures are available for excavator finance?
Most excavator finance is repaid through fixed monthly instalments over 3 to 5 years, though some lenders offer a balloon or residual payment structure that reduces monthly repayments in exchange for a lump sum owing at the end of the term. This can suit operators who plan to trade the excavator in before the term ends, but it’s worth modelling the numbers carefully, since a lower monthly repayment isn’t automatically the cheaper option overall.
Seasonal or project-based businesses sometimes look at structured or stepped repayments that align with cash flow, though not every lender offers this and it typically needs to be negotiated upfront rather than added later.
| Excavator class | Typical weight | Indicative price range | Common term |
|---|---|---|---|
| Mini excavator | 1-6 tonne | $30,000-$90,000 | 3-5 years |
| Midi excavator | 6-13 tonne | $90,000-$180,000 | 3-5 years |
| Standard excavator | 13-25 tonne | $180,000-$400,000+ | 4-5 years |
| Large/specialised excavator | 25 tonne+ | $400,000+ | 4-5 years |
Figures are indicative only and will vary by lender, asset and applicant.
What should you prepare before applying for excavator finance?
Approval tends to move faster when an applicant has ready:
- Recent financials or BAS statements demonstrating trading income
- Details of the specific machine, including make, model, hours and, for used equipment, service history
- ABN and business registration details
- A clear sense of intended use, since contractors doing consistent civil work are often viewed differently from a business financing its first excavator for occasional use
Operators should also factor in ongoing compliance and safety obligations around plant operation. Safe Work Australia publishes guidance on mobile plant and excavation safety that’s relevant to how excavators are operated and maintained once financed, and well-documented maintenance can also support resale value down the track.
How does resale value factor into excavator finance decisions?
Excavators generally hold their value better than many other categories of mobile plant, provided they’re well maintained and come from a brand with strong parts and service support in Australia. This matters for finance in two ways. First, a machine with strong resale value can support a more favourable balloon structure, since the lender has more confidence the asset will cover the residual amount at trade-in. Second, it affects your own decision-making around when to upgrade, since an excavator sold or traded before major component wear sets in typically returns more of its value than one run to the end of its working life.
Operators financing their first excavator sometimes underestimate ongoing costs beyond the loan repayment: undercarriage wear, hydraulic maintenance, and attachment servicing all add up over the life of the machine. Building a rough total cost of ownership picture, not just the monthly finance repayment, tends to produce a more realistic budget and can also inform which term and balloon structure actually make sense for your business.
TYG Finance arranges excavator finance and broader machinery finance for civil, landscaping and earthmoving operators across a range of machine sizes and business structures. If you’re weighing up new versus used or comparing loan structures, TYG’s equipment finance vs lease guide is a useful companion read.
Ready to look at finance for your next excavator? Contact TYG Finance to talk through what suits your business and the machine you have in mind.
Frequently asked questions
How much deposit do I need for excavator finance?
Many lenders offer 100% finance on excavators with a strong credit profile and established trading history, meaning no deposit may be required. Newer businesses or higher-value machines may need a deposit, typically in the 10-20% range, though this varies by lender.
Can I finance an excavator through a new business with no trading history?
It can be more difficult, but not impossible. Some lenders offer low-doc or alternative-documentation finance for newer businesses, though terms and rates typically reflect the higher perceived risk. A director’s personal credit history and any industry experience can also support the application.
Is it better to buy a new or used excavator for finance approval?
Both can be financed, but new machines typically have the most straightforward approval path and longest available terms. Used excavators remain readily financeable, particularly with good service history, though loan terms may be shorter depending on the machine’s age.
Can I include attachments like buckets or breakers in an excavator finance deal?
Often yes, particularly when purchased at the same time as the excavator. Some lenders bundle attachments into the main facility, while others may finance them separately. It’s worth discussing this upfront with your broker or lender.
What happens if my excavator finance term outlasts the machine’s useful working life?
Lenders typically cap loan terms to align with a machine’s expected remaining working life, particularly for used excavators, to avoid this situation. If circumstances change, refinancing or early payout options may be available, though terms vary by lender.