Equipment Finance in New Zealand: The Strategic Way to Acquire Business Assets

• Equipment finance is a major funding channel in NZ, with over $8.2 billion provided annually and high approval rates for established businesses.
• From 22 May 2025, the new 20% Investment Boost allows an immediate tax deduction on new assets, which can be amplified through smart finance structuring.
• Common structures like Hire Purchase, Finance Leases, and Operating Leases offer different benefits for cash flow, ownership, and tax.
• Working with a specialist like BEFA means getting a finance solution tailored to your business's cash flow, compliance needs, and long-term goals.

For years, many New Zealand business owners saw equipment finance as a simple transaction, a means to get a new ute on the road or a digger on site. But that mindset is changing. Today, smart SMEs see it as a strategic tool for protecting cash flow, managing compliance, and gaining a real competitive edge. It’s a massive part of the NZ economy, providing over $8.2 billion in funding annually and growing fast.

With approval rates sitting above 85% for established businesses, it's a far more accessible and responsive channel than traditional bank lending. In our experience, where banks can take weeks to make a decision, a specialist can often secure approval in just 2-5 days. This speed and flexibility are why we believe a well-structured finance agreement is one of the most powerful tools you can have.

At its heart, equipment finance is a way for your business to acquire and use essential assets without having to pay the full cost upfront. Instead of draining your working capital on a single large purchase, you use a finance facility to spread the cost over the asset's useful life. This frees up your cash for wages, inventory, and growth opportunities.

A common mistake we see is businesses grabbing the first approval they can get. The best finance solution, however, is one that’s structured around your specific business. It should match your repayment schedule to your revenue cycle, align with your tax strategy, and help you achieve your long-term business goals.

There are several ways to structure an equipment finance deal, and the right choice depends on whether you want to own the asset, how you manage your balance sheet, and your cash flow priorities. Here are the most common options we work with.

Hire Purchase (HP)

This is the classic "rent-to-own" model. You make regular payments over a fixed term, and once the final payment is made, you take full ownership of the asset. It’s a straightforward path to ownership and is great for core business assets you plan to keep for a long time, like primary excavators or production machinery. With an HP, you can typically claim depreciation and the interest portion of your payments as expenses.

Finance Lease

A finance lease is similar to an HP in that you have full use of the asset and are responsible for its maintenance. The asset appears on your balance sheet, allowing you to claim depreciation. At the end of the term, you usually have the option to purchase the asset for a pre-agreed residual value, extend the lease, or hand it back. It offers a bit more flexibility than a standard HP.

Operating Lease

Think of an operating lease as a long-term rental. You pay to use the asset for a fixed period, but you don't own it and it stays off your balance sheet. This is an excellent option for technology that dates quickly or vehicles you want to upgrade every few years. A key benefit is that monthly payments are often significantly lower; they can be 20–40% less than a comparable hire purchase agreement. At the end of the term, you simply return the equipment.

Structuring your asset purchase correctly is critical for optimising your tax position. And thanks to a new government incentive, there has never been a better time to invest in new equipment. From 22 May 2025, Inland Revenue’s Investment Boost allows eligible businesses to claim 20% of the cost of new assets as an immediate expense in the year of purchase. You can then claim depreciation on the remaining 80% as usual.

This is a significant opportunity to reduce your taxable income and improve your cash flow. By financing the purchase, you get the full, immediate tax benefit without the upfront cash outlay. We help our clients structure their agreements to make the most of these rules. For a full breakdown, you can read BEFA’s guide to unlocking the 20% immediate tax deduction on new equipment.

Every industry has unique needs, and your finance should reflect that. For many of our clients, this starts with getting the right digger, loader, or processing equipment. That's why we offer machinery finance solutions built specifically for NZ contractors and operators, with a focus on flexible terms and fast, local approval.

We see this on the ground every day with the contractors, engineers, and SMEs we support across the country. In Hawke's Bay, for example, getting ' Trucks, Diggers, and Gear Financed Fast ' is what keeps projects moving. It's about having a local partner who understands your reality, which is why we provide dedicated equipment finance for Hawke’s Bay operators.

The same strategic principles apply to financing your business vehicles, whether it's a single ute or an entire fleet of vans and trucks. The Investment Boost is especially powerful here. As industry experts have noted, from 22 May 2025, you can claim an additional 20% tax deduction on new business vehicles on top of standard depreciation.

This creates a perfect scenario: you can finance an upgrade to more reliable, fuel-efficient vehicles, improving your operations and brand image, while simultaneously securing a major tax deduction that boosts your cash flow. It’s a win-win.

Getting started is more straightforward than you might think. While every lender is different, here’s what you generally need:

• An active NZBN and GST registration.
• A trading history of at least 6-12 months.
• Basic financial statements (though some low-doc options exist).
• Details of the asset you want to purchase.

Our process at BEFA is designed to be simple and supportive. It starts with a conversation where we listen and learn about your business. From there, we design a finance structure that works for you, handle the application with the most suitable lenders from our panel, and manage the process through to settlement. We act as your advocate every step of the way.

You could go directly to a bank or finance company, but you'd only get their one-size-fits-all solution. As specialist brokers, we work for you. Our job is to understand your business and then access the entire market, including the 27% of business lending now handled by faster, more flexible non-bank funders to find the right fit.

We don’t just find a loan; we build a strategic finance solution. One that protects your working capital, aligns with your tax planning, and helps you grow your business sustainably. If you're ready to apply or just want to explore how the right equipment finance could help your business, we're here to talk.

_Disclaimer: The information provided in this article is for general guidance only and does not constitute financial advice. All financial decisions should be made in consultation with a qualified professional who can take your specific circumstances into account. Interest rates, fees, and lending criteria are subject to change._