Share
With EOFY behind you, FY27 is a chance to plan equipment purchases around cash flow and need, not a 30 June deadline. Here's what to review and how to structure it.
The new financial year is a chance to plan equipment finance around need and cash flow rather than the 30 June rush. Eligible small businesses can claim the $20,000 instant asset write-off per asset, which the government has made permanent from 1 July 2026. Review your current facilities, map out purchases across FY27 and match the finance structure to each asset.
With EOFY behind us and the new financial year underway, many businesses that rushed to beat the 30 June deadline are now taking stock. Others that held off on equipment decisions are starting to think about what they need for the year ahead.
Either way, the start of a new financial year is a natural point to step back and think about equipment finance strategically rather than reactively. Four things will help you plan your approach to equipment finance in FY27.
1. The instant asset write-off is to become permanent
One of the most significant changes for small business equipment planning is the government’s announcement that the $20,000 instant asset write-off threshold is proposed to be made permanent from 1 July 2026, if the legislation passes Parliament.
Update, September 2026: the ATO now lists the permanent $20,000 threshold as law, applying from 1 July 2026.
For several years, businesses have had to make investment decisions under annual uncertainty about whether the threshold would be extended. With the permanent threshold in place, that pressure goes, and businesses can plan equipment purchases around operational need and cash flow timing rather than tax deadlines.
How the $20,000 instant asset write-off works
| Feature | Detail |
|---|---|
| Who can use it | Small businesses with aggregated turnover under $10 million |
| Threshold | Assets costing less than $20,000 each |
| Limit on number of assets | None. The threshold applies per asset |
| When you claim | In the income year the asset is first used or installed ready for use |
| Assets of $20,000 or more | Can go into the simplified depreciation pool, at 15% in year one and 30% after |
| Status | Permanent from 1 July 2026 |
The write-off is a deduction, not a rebate. It brings forward the tax benefit of depreciation into the year you buy, which helps cash flow, but the purchase still has to make sense for the business. Confirm your eligibility with your accountant before you rely on it.
2. Now is a good time to review what you are currently financing
The start of a new financial year is an ideal moment to review your existing equipment finance commitments. Ask yourself:
- Are the interest rates on your current facilities still competitive?
- Are there assets you are still financing that are no longer core to your operations?
- Are any loan terms coming to an end that will require a decision about refinancing or replacement?
- Is there equipment you own outright that could support working capital through sale and leaseback or refinancing?
Getting across these questions early in the year gives you time to act thoughtfully rather than under pressure. Rates have moved since many facilities were written. The Reserve Bank cut rates in 2025 and then raised them in early 2026, so a facility arranged a year or two ago may no longer sit where you expect against the market.
3. Plan your asset purchases across the year, not just at EOFY
One of the downsides of the annual EOFY rush is that it compresses business investment decisions into a narrow window. That can lead to rushed choices, stretched cash flow and competition for finance and supply at the same time as everyone else.
With a full financial year ahead, businesses that map out their likely equipment needs now have more time to make better purchasing decisions. A simple plan might cover:
- which assets need replacing in the next 12 months, and roughly when
- which purchases fall under the $20,000 threshold and which don’t
- how each purchase affects monthly cash flow once repayments start
- whether seasonal peaks in your business suit buying earlier or later in the year
Our guide to equipment finance strategies for business growth planning goes into more detail, and why EOFY is a good time to look at asset finance covers the timing questions that still apply.
4. Choose the right finance structure for each asset
Not all equipment finance is the same, and the structure that suits one asset may not be right for another. A chattel mortgage gives the business ownership of the asset from day one and may allow GST to be claimed upfront, while a finance lease keeps the asset off the balance sheet and suits businesses that prefer to upgrade regularly. Hire purchase falls somewhere between the two.
| Chattel mortgage | Hire purchase | Finance lease | |
|---|---|---|---|
| Who owns the asset | Your business, from day one | The lender, until the final payment | The lender |
| Instant asset write-off or depreciation | May be claimed by the business | May be claimed by the business | Business usually claims lease payments instead |
| GST | May be claimed upfront if GST-registered | Check with your accountant | Included in each lease payment |
| Suits | Long-term use and ownership | Ownership at the end of the term | Regular upgrades |
The right choice will depend on the type of asset, how long you intend to use it, your GST registration status and your broader tax position. If you’re weighing up whether to keep cash in the business or pay outright, read how to use asset finance to upgrade equipment without draining cash. For businesses that already own equipment, our explainer on equipment finance vs equipment refinance sets out how each works.
Plan FY27 equipment finance early
If tax debts built up over EOFY, read what businesses with ATO debt should know about their options before taking on new finance. Lenders assess equipment finance on your business’s trading history, financial records and credit position, as well as the asset itself. Up-to-date financials make the process smoother, and our article on how to improve credit scores for equipment finance approval explains what lenders check.
A finance broker can help you compare your options across a range of equipment finance products and lenders, including business car loans for vehicles. Attain Loans is a business finance broker in Melbourne’s west that compares equipment and vehicle finance across its lender panel, subject to each lender’s assessment.
This article is general information only and doesn’t take into account your objectives, financial situation or needs. Tax outcomes depend on your circumstances. Consider whether it’s appropriate for you and speak with a licensed professional, including your accountant, before making a decision.
Further questions
What is the instant asset write-off for 2026?
Can I claim the instant asset write-off on financed equipment?
What happens to assets costing $20,000 or more?
Is the instant asset write-off threshold GST inclusive?
Should I buy equipment just to get a tax deduction?
This is general information only and is subject to change at any given time. Your complete financial situation will need to be assessed before acceptance of any proposal or product.
