Key highlights
- Trusts routinely obtain equipment finance right across Australian business
- The facility is written to the trustee for the trust
- Directors or beneficiaries behind the trust usually provide personal guarantees
- Correct documentation of the trust structure keeps things smooth
Yes, a trust can absolutely get equipment finance, and it is a very common structure in Australian business. The facility is generally documented to the trustee acting on behalf of the trust, with the machine as security and the individuals behind the trust usually providing guarantees. Lenders assess the trust's trading and the guarantors' positions. At Overdrive, broker Simon Kendrick compares more than 80 lenders to match your trust structure with the right one.
How trusts borrow for equipment
Trusts, whether family, discretionary or unit trusts, are a familiar structure to lenders, so equipment finance is well within reach. The loan is typically written in the name of the trustee acting on behalf of the trust, using the trust's ABN and trading history. Where the trustee is a company, that company enters the finance in its trustee capacity. The machine serves as security in the usual way. Because the people who control and benefit from the trust ultimately stand behind the business, lenders generally ask them to provide personal guarantees. Provided the trust trades soundly and the guarantors have reasonable profiles, this is a straightforward application for the market.
Trustees, guarantees and beneficiaries
Lenders look at who controls the trust and who benefits from it. A corporate trustee is common and generally well accepted, and its directors will usually guarantee the loan. Where an individual is trustee, that person typically guarantees it. Beneficiaries do not always need to be involved, but the guarantors, whoever they are, will be assessed on credit and identification. This means the personal positions of the key individuals matter, much as with any structure. Being clear about who the trustee is and who will guarantee the finance from the outset helps a broker direct the application to lenders comfortable with your particular trust arrangement.
Documents lenders want to see
For a trust, lenders generally want the trust's ABN details and, in many cases, a copy of the trust deed to confirm the trustee has power to borrow and grant security. Identification for the trustee and guarantors, plus recent business bank statements, complete the core file. Details of the machine, the supplier and any deposit are also needed. The trust deed requirement is the main difference from a simpler structure, so having it to hand avoids delay. A complete, correctly documented file lets a lender assess confidently and tends to produce both a faster answer and sharper pricing.
Why the right lender matters
Lenders vary in how they handle trusts, corporate trustees and deed requirements, so matching to the right one avoids friction. A broker knows which lenders are comfortable with trust structures and exactly what documentation each expects. Simon can compare more than 80 lenders on a single application, aligning your trust, its cash flow and the asset with lenders likely to approve and to price well. That prevents wasted applications, keeps credit enquiries to a minimum and ensures the trustee and guarantee paperwork is set up correctly from the start rather than being corrected later.
Financing a machine through a trust is routine when it is set up correctly. If you want it handled cleanly and priced competitively, Simon can compare the market and guide the documentation. Request a free quote to see what your trust can achieve.
Frequently Asked Questions
Whose name is the loan written in?
Typically the trustee's, acting on behalf of the trust, using the trust's ABN. Where a company is trustee, it enters the finance in that trustee capacity. The machine acts as security. Because the individuals behind the trust ultimately stand behind the business, lenders usually ask them to provide personal guarantees as well.
Will lenders want to see the trust deed?
Often, yes. Many lenders ask for the trust deed to confirm the trustee has power to borrow and grant security over the asset. Not every lender insists on it, but having it available avoids delay. A broker can tell you whether the lender assessing your deal will require the deed.
Do beneficiaries need to guarantee the loan?
Not usually. The guarantors are generally the trustee and, for a corporate trustee, its directors, rather than every beneficiary. Those guarantors are assessed on credit and identification. Requirements vary by lender, so it is worth confirming who needs to guarantee the finance for your particular structure before applying.
Is a corporate trustee a problem?
No, corporate trustees are common and generally well accepted. The finance is written to the company in its trustee capacity, and its directors usually guarantee it. Lenders are familiar with this arrangement. A broker can match you with lenders comfortable with corporate trustees and confirm the documentation each will need to see.
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