Written by Flexible agricultural loans and leases tailored to you
Agriculture finance is simply the blanket term for a range of different products that can help you access the assets your agribusiness needs. When it comes to financing purchases for your business through Savvy, you’ll have a few different options to choose from, all of which require you to use your asset at least 51% of the time for commercial purposes.
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What are my agriculture finance options?
Your main options for financing agricultural expenses are:
Chattel mortgage
If you’re looking to buy a car or vehicle, a chattel mortgage is usually the best bet (though they can be used for equipment too). These loans are secured by the purchase of the asset itself, serving as collateral for your agreement. Here’s a quick rundown of how they work:
- Choose a new or used asset that meets your lender’s eligibility criteria
- Borrow from $5,000 up to 100% of your asset’s purchase price
- Take between one and seven years to repay the loan
- Ownership of the asset rests with you from the beginning of the agreement
- Select a weekly, fortnightly or monthly payment schedule
- Repay your loan with interest and fees until it’s been paid off in full (not all lenders will charge the same fees)
- Deposits and balloon payments are both optional
- Some lenders may offer free early repayments
Finance lease
Another common choice for businesses is leasing vehicles and equipment. Unlike loans, these don’t require you to purchase the asset. The way they’re structured is as follows:
- Choose a new or used asset that meets your leasing company’s eligibility criteria
- Lease the asset for a period of between one and five years
- Select a weekly, fortnightly or monthly payment schedule
- Residual is mandatory and must meet a government-required minimum
- Ownership of the asset rests with your lender until the end of your lease and your residual is paid
- Your options for dealing with the residual are:
- Pay the residual and buy the asset
- Sell or trade in the asset to cover the residual and end your lease
- Sell or trade in the asset to cover the residual and start a new lease
- Refinance the residual and extend your lease by up to two years
- On-road costs such as insurance, maintenance and registration aren’t included in your lease payments
Operating lease
An alternative to a finance lease is an operating lease. These are generally only available for cars and roadworthy vehicles and come with a few distinct differences from finance leasing:
- No residual is included in the agreement
- At the end of your lease, you’ll return the asset to your leasing company
- On-road costs can be included in your lease payments, which makes them more expensive as a result
Business loan
Finally, you may also be able to use an unsecured or secured business loan. These are designed to be more flexible in how they’re used, as there’s no asset collateral. Let’s take a look at how they work:
- Borrow from $5,000 up to as much as $500,000, depending on your business’ borrowing power
- Either make use of collateral, such as property (secured) or take out a loan without collateral (unsecured
- Take between one and seven years to repay the loan
- Select a weekly, fortnightly or monthly payment schedule
- Repay your loan with interest and fees until it’s been paid off in full (not all lenders will charge the same fees), with each being higher in most cases to compensate for the lack of collateral
- Distribute the loan funds however you like across your business, from purchasing livestock to boosting cashflow
- Deposits are optional
- Free early repayments are more common with unsecured finance
Because of the lack of collateral, these can often be turned around more quickly than secured loans
What can I use my agricultural loan or lease for?
Each of the finance options we’ve mentioned can be used for a wide range of different farm or agriculture purchases. Here’s a list of what you may be able to buy or lease through Savvy:
Chattel mortgage
- Cars
- Tractors
- Trucks
- Ride-on mowers
- Forklifts
- Excavators
- Other heavy plant and machinery
Finance lease
- Cars
- Tractors
- Trucks
- Ride-on mowers
- Forklifts
- Excavators
- Other heavy plant and machinery
Operating lease
- Cars
- Trucks
- Other road vehicles
Business loan
- Livestock
- Inventory
- Vehicles or equipment ineligible to serve as collateral
- Improvements/renovations around your property
- Consolidation of business debts
- Boost to business cashflow
- Any other ad hoc expenses
Just because something you want to purchase isn’t on here doesn’t mean you can’t finance it, though. If you’re unsure about what your options are, you can speak to a member of our team today!
What are the tax benefits of agriculture finance?
Each finance type has its own rules around what can and can’t be claimed as a business expense on tax. Here’s a quick rundown:
| Chattel mortgage | Finance lease | Operating lease | Business loan | |
|---|---|---|---|---|
| Interest | ||||
| Fees | ||||
| Full payment | ||||
| GST on purchase | (claimed for you by lessor) | (claimed for you by lessor) | Applicable to some purchases | |
| Depreciation | (claimable by lessor) | (claimable by lessor) | Applicable to some purchases |
Note: the above table serves as a guide only. The amount you can claim will depend on the portion of your asset’s usage; for instance, if your vehicle is only used for business purposes 80% of the time, you’ll only be able to claim back 80% of the above. Speak with your accountant if you’re unsure what you can and can’t claim.
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Agriculture finance questions answered
Yes – lenders who offer (or specialise in) agricultural finance solutions can work with businesses that have seasonal income. They understand that the revenue stream of a farm is unlikely to be consistent year-round, so you may be able to negotiate an alternative payment plan, such as quarterly instalments instead of fortnightly or monthly.
Yes – you’ll have the option to pay out your chattel mortgage or business loan early and cancel your lease ahead of schedule. However, in most cases, you’ll be charged hefty fees for doing so. However, this is less common with unsecured business loans. It’s important to check what your loan or lease’s terms are in relation to early repayment before you sign on the dotted line.
Residuals on finance leases must meet the required minimum amount set by the ATO, which depends on the length of your lease term. These are as follows (correct as of March 2025):
- One year: 65.63%
- Two years: 56.25%
- Three years: 46.88%
- Four years: 37.50%
- Five years: 28.13%
Lease residuals can exceed each of the above but can’t be under these percentages. In contrast, there are no requirements for residuals on chattel mortgages, allowing you to negotiate your preferred amount with your lender.
As mentioned, business loans can essentially be used however you like, but they aren’t the most suitable option when it comes to purchasing a rural commercial property. By opting for a mortgage product instead, you’ll likely receive a lower interest rate and have much more time to repay it.
Invoice financing is a type of commercial finance that allows you to borrow against the value of invoices owed to your business. This can either come in the form of invoice factoring, where your invoices are sold to a third party, or invoice discounting, where you’re still responsible for debt collection but can use the debt as security for the loan. If your business deals in invoicing, this may also be an option for you.
Yes – at Savvy, we’re partnered with a range of lenders who are ready to work with businesses who’ve struggled with their credit in the past. Speak with one of our experienced consultants about your options today!
A hire purchase falls somewhere in between a chattel mortgage and lease. A financier purchases an asset, such as a vehicle, and allows you to use it throughout your term while you pay it off. However, ownership rests with the financier throughout your term and is only transferred to your business once the final payment is made. This option may be suited to businesses using off-balance sheet accounting, but the product is very rare today and offered by very few companies.
Some specialist lenders can offer financing specifically for farm livestock, which can be secured by a registered livestock mortgage. However, in other cases, property or other assets may be used.
As mentioned, business loans can essentially be used however you like, but they aren’t the most suitable option when it comes to purchasing a rural commercial property. By opting for a mortgage product instead, you’ll likely receive a lower interest rate and have much more time to repay it.
