Drill Rig Finance: Rates & How It Works

Key highlights

• Drill rig finance funds track, truck and trailer-mounted rigs for eligible ABN holders
• Indicative rates from around 6.55% p.a., subject to lender assessment
• Chattel mortgage, lease and rental structures suit different tax and cash-flow needs
• Project-based income can be structured around with seasonal or tailored repayments
• Comparing 80+ lenders on one application sharpens your offer

How does drill rig finance work?

Drill rig finance is commercial equipment lending secured against the rig. You select the machine, the lender settles with the supplier, and you repay over an agreed term, commonly three to five years, while the rig earns on projects. Because the asset provides security, you generally avoid tying up property or working capital. The most common structure is a chattel mortgage, where you own the rig from day one and the lender registers an interest until the final payment. Lease and rental arrangements are also available for businesses that prefer predictable payments or off-balance-sheet treatment. Given the values involved, structuring the deal to match your project income is where good broking earns its keep.

What indicative rates apply to drill rigs?

For well-qualified applicants, indicative rates start from around 6.55% p.a., subject to assessment. Your actual rate reflects whether the rig is new or used, its age and hours, your deposit, trading history and the term. A newer rig financed by an established drilling business with strong financials sits at the sharper end, while an older or specialised rig, or a thinner credit file, prices higher. Specialised drilling equipment can attract more conservative pricing because the resale market is narrower than for general earthmoving gear. Comparing 80+ lenders on one application is how you find the ones most comfortable with drilling assets, which materially affects the rate you are offered.

Which structure suits a drilling business?

Structure should follow your accounting and cash flow. A chattel mortgage gives ownership from day one and is popular where you want the rig on your balance sheet and to claim GST on the purchase up front, subject to your accountant's advice. A finance lease or rental keeps repayments predictable and can suit contractors who refresh equipment or want to preserve borrowing capacity. A balloon or residual reduces monthly repayments in exchange for a lump sum at term's end, which can align with project milestones. Because drilling income is often lumpy, some lenders will consider seasonal or structured repayments; discussing this upfront helps match repayments to when your projects actually pay.

What do lenders assess on drill rig finance?

Lenders look at you and the rig together. On your side they weigh ABN age, GST registration, credit history, existing commitments and serviceability across the business. On the asset side they consider the rig's type, make, age, hours and resale strength, since a machine with a broader market is easier to fund. Track and truck-mounted rigs from recognised manufacturers are generally viewed more favourably than niche or heavily modified units. Because drilling can be project-dependent, demonstrating a pipeline of work or contracts strengthens your case. A clean file, a clear supplier quote and evidence of steady utilisation help Simon present your strongest position to the panel.

Can you finance a used drill rig?

Yes. Used drill rigs are financed regularly, though age and specialisation matter more than with common earthmoving machines. Lenders will fund a sound, well-maintained used rig with a realistic valuation, but older or highly specialised units may attract a shorter term, a firmer deposit or a slightly higher indicative rate because the resale market is narrower. Service history and an independent inspection carry real weight. Buying used can be a smart way to enter a drilling niche or expand capacity for less capital. Simon can identify which lenders are most comfortable with used and specialised rigs, which is where comparison across 80+ lenders genuinely changes the outcome.

Low-doc or full-doc for a drill rig?

Both paths exist. For eligible applicants, low-doc finance up to around $500,000 is available without full financial statements, leaning on your ABN, GST registration and clean credit file, often with property ownership. It suits established drillers who want speed. Full-doc, with tax returns and financials, can unlock larger limits and sharper pricing, which matters for higher-value rigs. Given the sums involved in drilling equipment, many deals sit in full-doc territory, but not all. Simon assesses your profile and the rig's value together and recommends the path that produces the best realistic result, so you gather only the documents your particular deal requires.

How to get the most competitive deal

Comparison is the biggest lever, because lender appetite for drilling equipment varies widely. Beyond that, keep your credit file clean and your ABN and GST current, have a clear supplier quote ready, and gather evidence of your work pipeline. Consider whether a deposit or trade-in improves your rate, and think about whether a balloon or seasonal structure suits your project income. Avoid lodging several applications yourself, since each enquiry can mark your file. One well-prepared application submitted to 80+ banks and non-bank lenders protects your file and surfaces the lenders best suited to drilling assets, which is where the sharpest structures are found.

If a drill rig is next for your business, an obligation-free quote is the practical first step. Simon can run a soft credit check that leaves no mark on your file, compare 80+ banks and non-bank lenders, and return indicative rates and structures matched to your drilling work and cash flow. For eligible applicants, decisions are often available within 24 to 48 hours, so you can commit to the rig and get it earning on your next project. Contact Overdrive Machinery Finance today to see what your drill rig finance could look like.