Purchasing a crane can help a construction business take on larger projects, reduce its reliance on hired equipment and gain greater control over project timelines. However, it can also require a significant upfront investment.
Crane finance can help spread the cost of purchasing new or used lifting equipment over an agreed loan term. This may allow your business to add the equipment it needs while retaining working capital for wages, materials, insurance, maintenance and other operating expenses.
For construction companies, civil contractors, crane operators and infrastructure businesses, choosing the right finance structure can be just as important as choosing the crane itself.
What Is Crane Finance?
Crane finance is a type of commercial equipment finance used to purchase cranes and other specialised lifting equipment for business purposes.
Rather than paying the full purchase price upfront, the business borrows the funds required to acquire the crane and repays the finance over an agreed period. In many cases, the crane being purchased is used as security for the loan.
Crane finance may be available for equipment including:
- Mobile cranes
- Tower cranes
- Crawler cranes
- Pick-and-carry cranes
- Truck-mounted cranes
- Vehicle-loading cranes
- All-terrain cranes
- Rough-terrain cranes
- Bridge and gantry cranes
- Specialised construction lifting equipment
The finance options available will generally depend on the crane’s purchase price, age, condition, intended use and the financial position of the business.
Why Construction Businesses Use Crane Finance
Preserve working capital
Purchasing a crane outright can use a substantial portion of a construction business’s available cash.
Financing the purchase may allow the business to retain funds for:
- Employee and subcontractor payments
- Construction materials
- Fuel and transport costs
- Insurance and registration
- Servicing and repairs
- Deposits required for new projects
- Tendering and mobilisation costs
- Unexpected project expenses
Our asset finance guide explains how finance can help businesses acquire vehicles, machinery and equipment without necessarily funding the entire purchase from existing cash reserves.
Increase project capacity
Owning a crane may allow a construction business to complete more lifting work internally rather than relying entirely on third-party crane hire.
Depending on the business and the type of equipment purchased, this may help it:
- Tender for larger construction projects
- Accept projects with more complex lifting requirements
- Reduce delays caused by hired equipment availability
- Improve control over scheduling
- Expand into civil or infrastructure work
- Generate additional income by hiring the crane to other businesses
The purchase should still be supported by realistic demand. A crane that remains unused for extended periods can continue generating finance, insurance, maintenance and storage costs without producing revenue.
Match repayments with the crane’s working life
A commercial crane will generally be purchased to generate income over several years. Finance can spread the cost across part of the equipment’s working life rather than requiring the business to fund the full amount before the crane begins producing revenue.
This can make project budgeting and cash-flow forecasting more manageable.
Common Crane Finance Options
The most suitable finance structure will depend on whether the business wants to own the crane, its cash-flow requirements and the accounting treatment of the purchase.
Chattel mortgage
Under a chattel mortgage, the business purchases and owns the crane while the lender registers an interest over the asset as security for the loan.
A chattel mortgage may provide:
- Ownership of the crane from the beginning
- Fixed or variable repayment options, depending on the lender
- A choice of finance terms
- The option to include a balloon payment
- Potential tax benefits, subject to eligibility and professional tax advice
Finance lease
Under a finance lease, the finance provider generally purchases the crane and allows the business to use it in exchange for regular lease payments.
The finance provider usually remains the legal owner during the lease term. Conditions relating to the crane at the end of the term will depend on the agreement.
The Australian Government’s guide to leasing or buying business vehicles and equipment provides an overview of the differences between purchasing and leasing equipment.
Commercial equipment loan
A secured commercial equipment loan may also be used to purchase a crane. The crane will generally be used as security, which can provide different terms from an unsecured business finance facility.
Balloon or residual payment
A balloon is a lump sum left owing at the end of the finance term.
Including a balloon can reduce regular repayments, but it does not remove the amount owed. At the end of the term, the business will need to pay, refinance or otherwise manage the outstanding amount.
The balloon should be considered against the expected future value of the crane, its projected utilisation and the business’s longer-term plans.
Can You Finance a New or Used Crane?
Finance may be available for both new and used cranes, although lenders can assess the equipment differently.
Financing a new crane
A new crane may provide:
- A manufacturer warranty
- Modern safety and operating technology
- Lower initial maintenance requirements
- Greater certainty regarding its condition
- A longer expected working life
The higher purchase price of new equipment will generally result in a larger finance requirement.
Financing a used crane
A used crane may reduce the amount the business needs to borrow, but additional due diligence is important.
Before purchasing used equipment, consider checking:
- The crane’s age and operating hours
- Service and maintenance records
- Inspection reports
- Accident and repair history
- Manufacturer specifications
- Compliance documentation
- Expected remaining working life
- Availability of replacement parts
- Current market and resale value
- Whether another party has finance registered over the crane
The government’s Personal Property Securities Register guidance for second-hand machinery explains how a PPSR search can help identify registered security interests affecting used equipment.
What Do Lenders Consider?
Business trading history
An established construction business with a consistent trading history may have access to more lender options than a newly established company.
Newer businesses may still be considered, but could be asked to provide a deposit, additional supporting documents, evidence of industry experience or stronger guarantees.
Business cash flow
Lenders will generally assess whether the business can comfortably meet the proposed crane loan repayments alongside its existing operating expenses and financial commitments.
They may review:
- Business bank statements
- Revenue and expenses
- Existing business debts
- Current equipment repayments
- Tax obligations
- Seasonal changes in cash flow
Existing contracts and future work
If the crane is being purchased to complete a particular project or service a new contract, supporting evidence may help demonstrate how the asset is expected to generate revenue.
Useful evidence may include:
- Signed construction contracts
- Tender awards
- Purchase orders
- Customer agreements
- Forward work schedules
- Details of upcoming projects
Revenue projections should be realistic and supported by evidence wherever possible.
Crane type, age and value
Lenders may consider the crane’s age, condition, specifications and expected resale value.
A widely used crane model with clear service records and an established resale market may be assessed differently from an older, heavily modified or highly specialised machine.
Deposit or business contribution
Some businesses may qualify to finance most or all of the crane’s purchase price. Other applications may require an upfront deposit or contribution.
The amount required can depend on:
- The strength of the business
- The crane’s age and condition
- The lender’s equipment policy
- The purchase source
- The business’s credit history
- The proposed loan term
Credit profile
The credit history of the business and its directors may be reviewed as part of the application.
Existing debts, recent credit enquiries, repayment conduct, defaults and overdue tax obligations can all affect the available options.
Licences and insurance
Operating certain cranes and completing dogging or rigging work can require the appropriate high-risk work licence.
Safe Work Australia’s licensing guidance provides information about high-risk work licences for crane, hoist, dogging and rigging work.
The lender may also require evidence that the crane can be adequately insured before the finance is settled.
What Documents Are Needed for Crane Finance?
Preparing the application before committing to a particular crane may help reduce delays when suitable equipment becomes available.
Depending on the lender and the application, your business may need to provide:
- ABN and company details
- Identification for directors or business owners
- Recent business bank statements
- Business activity statements
- Business financial statements
- Personal or business tax returns
- Existing loan statements
- A supplier quote or tax invoice
- Details and specifications of the crane
- Service and inspection records for used equipment
- Evidence of contracts or upcoming projects
- Details of a deposit or trade-in
- Insurance information
Not every application will require every document. Some established businesses may qualify for streamlined assessment, while larger or more complex crane purchases may require full financial information.
Are There Tax Benefits to Financing a Crane?
A crane used to produce assessable business income may be treated as a depreciating asset.
The Australian Taxation Office’s depreciating asset guidance explains that eligible businesses may generally claim deductions for the decline in value of assets used to produce assessable income.
A GST-registered business may also be eligible to claim GST credits for qualifying business purchases. The ATO provides further information about when a business can claim a GST credit.
Possible tax considerations may include:
- Depreciation deductions
- Interest expenses
- GST input tax credits
- Lease payment treatment
- Balloon or residual payments
- Private versus business use
Tax outcomes depend on the business, the equipment and the finance structure. Speak with a registered accountant or tax adviser before selecting finance based on potential tax benefits.
Common Crane Finance Mistakes
Looking only at the repayment amount
A lower monthly repayment does not necessarily mean the finance will cost less overall.
A longer loan term or larger balloon can reduce regular repayments while increasing the total interest paid or the amount remaining at the end.
Construction businesses should compare:
- The interest rate
- Establishment and ongoing fees
- The finance term
- The balloon payment
- The total amount repayable
- Early repayment conditions
Buying the crane before confirming finance
Paying a non-refundable deposit before obtaining finance approval can place the business at risk if the application is declined or the lender will not accept the proposed equipment.
Where possible, discuss the potential purchase with a broker before entering an unconditional agreement.
Overestimating utilisation
The crane should be supported by genuine operational demand.
Before purchasing, estimate how many projects or operating days will be required each month to cover:
- Finance repayments
- Insurance
- Fuel
- Transport and mobilisation
- Operator wages
- Inspections and certification
- Servicing and maintenance
- Storage
- Unexpected downtime
Ignoring maintenance and downtime
Finance repayments are only one component of crane ownership.
An older crane may have a lower purchase price but require more frequent repairs, harder-to-source parts or longer periods out of service. These costs should be considered when comparing new and used equipment.
Applying to unsuitable lenders
Not every lender has the same appetite for specialised construction machinery, older cranes, private purchases or high-value equipment.
Submitting applications to unsuitable lenders can also create unnecessary credit enquiries. A commercial finance broker can help identify lenders whose policies are more closely aligned with the equipment and the business.
Why Use a Broker for Crane Finance?
Commercial crane finance can be more complex than financing a standard car or work vehicle.
A broker can help assess:
- The type and value of the crane
- Whether it is new or used
- Dealer, auction and private-sale requirements
- Available finance terms
- Deposit requirements
- Balloon payment options
- The financial position of the business
- Lender policies for specialised equipment
LoanBrix can compare crane finance structures from its lender panel based on the equipment being purchased and the needs of the construction business.
Businesses purchasing other commercial vehicles or machinery can also explore our commercial truck finance and equipment finance options.
Speak to LoanBrix About Crane Finance
Whether you are replacing an ageing crane, purchasing your first machine or expanding your lifting capacity for a new construction contract, the finance should support the business without placing unnecessary pressure on its cash flow.
LoanBrix can assist construction companies, crane operators, civil contractors and infrastructure businesses seeking finance for eligible new or used cranes.
Our brokers can help you:
- Compare commercial crane finance options
- Review possible repayment structures
- Understand deposit and documentation requirements
- Explore finance for eligible new or used equipment
- Coordinate the finance application through to settlement
Planning to purchase a crane for your construction business? Speak to LoanBrix about your finance options before committing to the equipment.
This information is general in nature and does not constitute financial, legal, accounting or tax advice. Finance approval, rates, terms and conditions depend on the lender’s assessment and applicable eligibility criteria.
