- Last Updated: 8 May 2026
Asset Based Loans Australia
Unlock capital using the value of your assets to support cash flow and growth
- Access funding secured against property, equipment, vehicles, or personal assets of value
- Get a portion of your asset’s value in funding
- Maintain use of your assets while accessing funds
- Purchase assets without paying the full amount in cash
Get an Asset Based Loan with Dark Horse Financial
1
Contact Our Team
Fill out our online form to apply for an asset based loan. We’ll get in touch with you fast to understand your situation and make a recommendation.
2
Submit Application
We’ll expertly handle your application from start to finish. Some lenders can approve asset based finance in a few hours.
3
Get Funded
Once approved, documentation is signed electronically, making settlement fast. Once settled, the funds will be disbursed to your account.
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What are Asset Based Loans?
Asset based lending is a financing solution where the loan is secured by assets. These assets could range from equipment, accounts receivable, machinery, real estate, to personal assets of value. Essentially, the physical assets act as security for the loan, which typically results in lower interest rates compared to unsecured lending solutions. The value of the loan is often determined by the value of the assets being leveraged.
With asset based commercial loans, you can use any tangible asset to secure financing, including:
- Business Plant and Equipment
- Residential & Commercial Real Estate
- Vehicles & Yellow Goods
- Invoices or Accounts Receivable
How Asset Based Lending Works
First, the lender evaluates the asset. The loan amount is typically a percentage of the asset’s value. For example, a lender might offer 80% of the value of an asset. Once the loan is approved, the borrower can use the funds for various business needs. Asset based commercial lending also allows business owners to purchase assets without paying the whole amount upfront, spreading the cost over time.
Why Your Business May Need Asset Based Financing
Get Financing for High Capital Needs
Asset based finance is ideal for businesses with valuable assets and high capital demands. Whether your company experiences seasonal fluctuations, requires funding for growth, or needs to manage day to day expenses, asset based loans provide the flexibility to access funds when you need them most.
Purchase Assets Without Having to Pay Upfront
One of the main advantages of asset based finance is the ability to acquire new assets without paying the full amount upfront. This means you can purchase equipment, vehicles, or property and spread the cost over time, improving cash flow and preserving working capital. It’s a smart solution for businesses looking to grow without overextending their cash position.
What’s Considered an Asset?
In the context of asset based loans, an asset is any tangible property owned that can be used to secure financing. Lenders assess the value and liquidity of these assets to determine how much they are willing to lend. Here are some common types of business assets that can be considered for asset based loans:
- Equipment: Machinery, plant equipment, computers, and other equipment can be used as security. Equipment is a common asset used in asset based lending.
- Real Estate: Real estate, such as homes, office buildings, warehouses, or factories in the director’s name, their spouse’s name, or in a family trust, can serve as security for larger loans. Real estate is typically considered a high value asset and may allow for more substantial borrowing amounts.
- Vehicles: Company owned vehicles, including cars, trucks, freight vehicles, and delivery vans, can also be used as security in an asset based loan.
- Accounts Receivable: These are the outstanding invoices or money owed to the business by customers for products or services provided. Accounts receivable are used as security for invoice finance or selective invoice finance. Receivables are expected to be converted into cash once the customers pay, so they are ideal for financing.
Considerations for Asset Valuation:
Lenders will assess the value of your property through different criteria, such as:
- Liquidity / How easily it can be sold or converted into cash
- How fast it depreciates or how much it has already depreciated
- The director’s clear ownership of the asset, free from legal claims or those that are not already used as security for a different loan
Types of Asset Based Loans
Property Asset Based Loans
- What it is: This type of financing uses real estate as security. It is often used for large scale investments, such as purchasing new properties or expanding existing facilities. It’s also often used to consolidate debts, including larger outstanding tax debt.
- How it works: The lender offers a loan based on a percentage of the property’s market value. These loans typically have longer terms and lower interest rates compared to other asset based loans.
Equipment Financing
- What it is: Equipment financing allows businesses to raise capital against their existing assets, providing funding while maintaining use of their equipment. Equipment financing also allows businesses to purchase machinery or equipment without paying the full amount upfront. The asset serves as security.
- How it works: The business owner uses their existing equipment as security for a loan, raising the capital they need. This type of financing can also be used to purchase equipment. The business takes ownership of the equipment at the time of purchase. The borrower can continue using the equipment while repaying the loan, and ownership is retained once the loan is fully repaid.
Invoice or Accounts Receivable Financing
- What it is: Accounts receivable financing allows businesses to borrow money against their outstanding invoices. This type of financing is often used by companies with long payment cycles, helping them to manage cash flow more effectively.
- How it works: The lender advances a percentage of the value of the accounts receivable, typically around 85%.
Second Mortgage
- What it is: A second mortgage is a type of asset based loan where a business borrows against the equity in a property that already has an existing mortgage. This provides an additional source of funds by leveraging the same property as security.
- How it works: The business takes out a second loan, which is secured by the same property as the first mortgage. The second mortgage is subordinate to the first, meaning the primary lender has priority in case of default. This loan can be used for various purposes, such as expansion or working capital.
Advantages and Disadvantages of Asset Loans Australia
Advantages:
- Access to Capital: Asset based loans provide businesses with access to funding that can be used for working capital and business expansion.
- Maintain Use of Assets: Asset based finance allows businesses to maintain use of their assets while using them to access financing,
- Potentially Lower Interest Rates: Because the loan is secured by assets, lenders often offer lower interest rates compared to unsecured loans.
Disadvantages:
- Valuation Costs: The process of valuing assets for security requires a fee and typically takes a day to a week to be completed.
- Borrowing Limits: The amount a business can borrow is typically limited by the value of its assets, which sometimes may not be sufficient for larger financial needs.
Asset Based Loans Rates
One of the most critical factors for businesses considering an asset backed loan is understanding the rates. Interest rates on asset based loans vary depending on several factors:
- Type of Asset: Different types of security carry different levels of risk, which influences the interest rate. For example, loans secured by property generally have lower rates compared to those secured by inventory or accounts receivable.
- Loan to Value Ratio (LVR): Higher LVR ratios, where the loan amount is a larger percentage of the asset’s value, often come with higher interest rates.
- Economic Conditions: Broader economic conditions, including the current cash rate set by the RBA, also impact asset based loans rates.
- Lender’s Risk Assessment: Each lender will assess risk differently, leading to variations in interest rates. This assessment includes the liquidity of the assets, the borrower’s credit profile, and the industry in which the business operates.
Calculate Your Asset Finance Repayments
If you want to know how much you’ll pay in instalments for your equipment loan, you can use our Asset Finance Calculator.
Our calculator gives you an estimate repayment amount based on the loan total amount, interest, loan term, and balloon payments, if applicable.
Leverage Your Assets to Grow Your Business
Why let valuable assets sit idle when they could be working for you? With asset based business loans and asset based home loans, you can unlock the value of your asset to access the capital needed to grow, manage cash flow, or invest in new opportunities.
Reach out to us today to learn more about how asset based finance can benefit your business.
FAQs about Asset Based Finance
Asset based finance offers several benefits, including the ability to leverage assets for funding, maintaining use of the asset, and potentially getting lower interest rates than unsecured loans. It is also useful for managing cash flow, especially for businesses with seasonal fluctuations or high capital requirements.