Quick answer
Plant hire businesses can finance excavators, loaders, rollers and skid steers they hire to others, with each machine as security. Lenders look past the machine to the hire business itself: utilisation, hire rates, customer spread, maintenance and how the fleet is protected. Long-term hires may also need registering on the PPSR to protect your machines if a customer fails, which lenders increasingly expect to see.
Key points
- Lenders assess utilisation and customer spread, not just the machine's value.
- Popular sizes and brands keep resale strong and finance simpler.
- Hire agreements over two years are generally PPS leases that should be registered.
- Many yellow goods meet the PPSR's definition of a motor vehicle, so serial numbers matter.
- Staged fleet growth is easier to approve than buying a whole fleet at once.
Yes, you can finance machines you plan to hire out, and lenders do it every day. But a hire fleet is assessed differently from plant you operate yourself. Lenders look at utilisation, customer spread and how well your machines are protected while someone else has them, and they increasingly expect long-term hires to be registered on the PPSR.
Plant hire can be a terrific business: machines earn while you sleep, and a well-run fleet builds equity with every hire. It’s also capital-hungry. Every new excavator, loader or roller is a big purchase, and growth usually means finance. This guide explains how lenders offering yellow goods finance look at a hire fleet and how to present yours so it’s read correctly.
How do lenders look at a hire fleet?
When a civil contractor finances an excavator, the lender asks about the contractor’s jobs. When a hire business finances the same excavator, the lender is really asking a different question: will this machine stay out on hire, earning enough to cover its repayments, maintenance and downtime?
To answer that, assessors want to understand:
- Utilisation. Roughly how often existing machines in the same class are on hire.
- Hire rates and terms. Daily, weekly and monthly rates, and how you invoice and collect.
- Customer spread. A fleet that depends on one or two big customers is more fragile than one hired to many builders, landscapers and councils.
- Fleet mix. Popular sizes and brands with deep second-hand markets support lending better than niche machines.
- Maintenance and tracking. Service schedules, telematics and check-in and check-out processes protect the security.
The more of this you can show with real numbers from your own records, the less a lender has to assume.
Dry hire or wet hire: does it change the deal?
It can, mainly because of who’s in the seat.
| Dry hire | Wet hire | |
|---|---|---|
| Who operates | The customer | Your operator |
| Wear and damage risk | Higher, less control | Lower, your standards |
| Extra costs | Delivery, cleaning, repairs | Wages, super, operator insurance |
| What lenders want to see | Strong hire agreements, damage process, insurance | Operator availability, wage costs in the budget |
Neither is better for finance on its own. What matters is that your agreements, insurance and processes fit the model you run. Business.gov.au lists the types of business insurance worth considering, including machinery breakdown and public liability, and our guide to insurance on financed machinery explains what lenders typically require.
Why should a hire business care about the PPSR?
This is the step many hire businesses don’t think about until it hurts. When you hire a machine to a customer for a long period, the law can treat that arrangement as a security interest, and if you don’t register it, you may lose out if the customer goes broke.
The PPSR’s guidance on hire and rental explains that arrangements lasting longer than two years are generally affected, while those of two years or less generally aren’t. For agreements entered into since 20 May 2017, the PPSR’s PPS lease change page confirms that leases with a set term of more than two years, including renewal options, fall into this category.
If an affected hire isn’t registered and the customer becomes insolvent, the PPSR warns you become an unsecured creditor and may recover little or nothing, while other secured creditors can be paid from the goods first.
Two more points matter for yellow goods:
- Serial numbers. The PPSR’s definition of a motor vehicle covers land-based items capable of more than 10 km/h with more than 200W of power, and it notes many yellow goods fall within it. Registering against the serial number as well as the customer adds protection.
- Timing. To get the strongest priority, registration needs to happen before the machine is delivered.
Most short-term hires won’t need registering, but if you’re doing long-term or open-ended hires to a major customer, it’s worth setting up properly. A lender financing your fleet will be pleased to see it.
If you’re planning your next fleet addition, you can start a quick enquiry and a real person will talk through how to stage it.
How should you grow the fleet?
Most hire businesses grow in steps, and lenders tend to prefer it that way.
- Add machines where demand is proven. If your 5-tonne excavators are always booked out, another one is easy to justify. A new class you’ve never hired is harder.
- Finance in tranches. A few machines at a time, with utilisation records between each step, reads better than one large application.
- Keep popular specs. Common sizes and well-supported brands hold value and resell quickly if you need to trim the fleet.
- Watch total exposure. Lenders look at all your asset finance together, not just the new machine.
- Use equity in older machines. Paid-off machines can sometimes be used to fund growth through a sale and leaseback or refinance.
Can you finance used machines for a hire fleet?
Yes, and many hire businesses build their early fleet this way. A well-maintained used machine can earn the same hire rate as a new one for a fraction of the price, which makes the numbers work faster.
Lenders will look closely at a few things on used plant:
- Engine hours and service history. Hire machines work hard, so records matter even more than usual.
- Brand and size. The machines customers ask for most are the ones that resell best.
- Where it came from. Ex-hire machines from other fleets, auctions and private sellers are all common, but a PPSR search by serial number is essential before you pay.
- Age at the end of the term. Older machines may attract shorter terms.
Used machines also suit a hire business because they let you test demand for a new class without committing to a new-machine price. If a used 8-tonne excavator stays booked, the next one can be new. For businesses that also hire out marquees, furniture or event gear, the event hire business loan page covers that side of the hire world, and our specialised equipment guide explains why niche machines are valued more cautiously.
Illustrative example: a regional hire yard adds three machines
Illustrative only. A regional plant hire business runs twelve machines, mostly compact excavators and skid steers, hired to builders, landscapers and a local council. Its records show the 5-tonne excavators and tracked loaders are out most weeks, with waiting lists in spring.
The owner plans to add two 5-tonne excavators and one tracked loader, about $280k in total including attachments. The application includes twelve months of hire records by machine, a customer list showing no single customer above a modest share of revenue, service logs, and copies of the standard hire agreement. For the two long-term council hires, the owner has PPSR registrations in place. The lender sees proven demand, a spread of customers and a well-protected fleet, and finances the three machines on chattel mortgages.
What documents should a hire business prepare?
- equipment quotes with serial numbers and attachment lists
- hire records or utilisation reports by machine class
- a customer list with rough revenue split
- your standard hire agreement and any long-term contracts
- PPSR registrations for long-term hires, if any
- insurance schedule covering the fleet
- financial statements and recent bank statements
Our yellow goods finance page covers how lenders value earthmoving plant, and the equipment finance page covers wider options.
Ready to put another machine on the hire list?
Every machine that earns its keep makes the next one easier to fund. The trick is showing a lender the demand is real and the fleet is protected.
Sending an enquiry takes about 60 seconds, and there’s no credit check at that stage. We don’t blast your details to a pile of lenders, so you can get on with running the yard. A person with hire-industry sense reads about your fleet and customers, then calls. Please keep the answers accurate, including how many machines you run now and what you want to add, which lets us aim for the right fit straight away.
Frequently asked questions
Do lenders treat plant hire differently from owner-operated plant?
Yes. For owner-operated plant, the lender looks at your contracts and jobs. For a hire fleet, they look at how often machines are out on hire, who your customers are, how you price, and how you protect the machines while someone else is running them.
Is dry hire riskier than wet hire for finance?
It can be. With dry hire the customer operates the machine, so wear, damage and recovery risk are higher. Lenders want to see solid hire agreements, insurance arrangements and a process for checking machines in and out. Wet hire, with your operator, keeps more control but adds wages.
Do I need to register my hire agreements on the PPSR?
According to the PPSR, arrangements lasting longer than two years are generally affected and should be registered to protect your interest, while hires of two years or less generally aren't. Registering means you aren't left as an unsecured creditor if a long-term customer becomes insolvent.
Can a new plant hire business get finance?
It's possible, especially if the owner has industry experience and some committed customers. Lenders may ask for a deposit, extra security such as property, or start with a smaller fleet before adding more.
Can I finance attachments for hire?
Usually. Buckets, augers, hammers and tilt hitches are commonly included, and many hire businesses earn good returns hiring attachments separately. Expensive attachments can also be financed on their own if they have a resale market.