Quick answer
To replace damaged or broken equipment quickly, get a written quote or invoice for the replacement, check what insurance will pay and when, and decide between new, used or hire. Funding is commonly arranged as unsecured cash-flow funding sized on bank statements (typically $5,000 to $500,000) or a property-secured loan for larger amounts ($20,000 to $5,000,000). Same-day funding is possible for smaller unsecured amounts.
Key points
- The fastest replacement is often good used equipment or hire-then-buy.
- If insurance will pay later, fund the replacement now and repay from the payout.
- Unsecured funding suits trading businesses; property security suits larger or multiple items.
- Keep the old asset details — the ATO's balancing adjustment rules apply to payouts.
- Unsecured
- Typically $5,000 to $500,000
- Property-secured
- $20,000 to $5,000,000
- Possible timing
- Same-day funding possible for smaller unsecured amounts
- Purpose
- Business purposes only
For a lot of businesses, one machine is the business. A refrigerated truck for a caterer, an oven for a bakery, a CNC router for a joinery, a tipper for an earthmover. When it’s destroyed in a flood, burnt in a fire or simply dies, the question isn’t whether to replace it — it’s how fast, and how to pay.
This page covers the funding side. For the first-day decisions after a breakdown, see equipment breakdown.
What are your replacement choices?
| Choice | Speed | Cost | Best when |
|---|---|---|---|
| New from a dealer | Depends on stock and lead times | Highest | Reliability matters most, stock is available |
| Good used unit | Often fastest | Medium | Standard equipment, inspection possible |
| Auction purchase | Depends on auction dates | Variable | You know exactly what to look for |
| Hire, then buy | Immediate | Hire rate adds up | Right replacement isn’t available yet |
| Repair the damaged unit | Depends on parts | Usually lowest | Damage is limited and the unit is otherwise sound |
Whatever you choose, get it in writing — a quote, invoice or inspection report. Lenders and insurers both need it.
How does insurance fit in?
If the equipment was insured, the payout may eventually cover part or all of the replacement. The problem is timing: many businesses can’t wait weeks to replace a machine that earns their income.
A practical approach:
- Lodge the claim with photos, serial numbers and purchase records.
- Tell the insurer you need to replace the item to keep trading, and ask whether it affects the claim.
- Fund the replacement now.
- Repay the funding, or reduce it, when the payout arrives.
If the payout will be less than the replacement cost, see the underinsurance gap.
What funding options work for equipment?
Two options cover most situations, and neither is tied to where you buy the equipment. If you’d like help working out which fits, send a quick enquiry — it doesn’t touch your credit file.
- Unsecured cash-flow funding — typically $5,000 to $500,000, sized on turnover and bank statements. Suits trading businesses replacing one or two items, plus hire and installation. Same-day funding is possible for smaller amounts. See unsecured emergency cash.
- Property-secured loan — from $20,000 to $5,000,000 over residential or commercial property. Suits larger or multiple replacements, businesses whose statements were hit by the crisis, or when you want one facility for equipment and other recovery costs. See property-secured emergency funding.
Some owners use a dealer’s own finance for brand-new machines. The advantage of the options above is flexibility: you can buy used, at auction or privately, and include installation, hire and the lost trading days in one facility.
What will a lender want to see?
| Item | Why |
|---|---|
| Replacement quote or invoice | Confirms the amount and purpose |
| 6–12 months of bank statements | Shows the business can service the loan |
| Insurance claim details | Shows a possible repayment source |
| ABN or ACN and ID | Identity and entity checks |
| Property details (if secured) | Security for larger amounts |
Bad credit or an ATO debt doesn’t automatically rule you out — each is considered case by case. See emergency funding with bad credit.
What about tax on the old and new equipment?
When a depreciating asset is destroyed and you receive a payout, the ATO applies a balancing adjustment: if the payout exceeds the asset’s book value, the excess is assessable; if it’s less, you can deduct the difference. The new equipment then starts its own depreciation. Ask your accountant how this lands for your business before the end of the financial year.
Illustrative example only: a mobile coffee business’s van-mounted espresso machine is destroyed in a workshop fire. A used commercial machine is available the same week. The owner funds it with a small unsecured facility, is back at markets by the weekend, and uses the insurance payout six weeks later to clear most of the balance.
What does downtime really cost?
Before choosing between repair, used, new and hire, put a number on each day the equipment is out of action. A simple calculation:
- average daily revenue the equipment supports
- minus the costs you avoid while it’s idle (materials, fuel)
- plus penalties or lost contracts from missed deadlines
- plus wages for staff who can’t work at full capacity
Multiply by the number of days each option takes. A replacement that costs more upfront but is working next week often beats a cheaper option that keeps you idle for a month. Put the result into our shutdown cash runway tool to see how long your cash lasts in the meantime.
How do you make the next breakdown less painful?
- Keep a list of critical equipment with serial numbers, ages and replacement costs.
- Know two suppliers and a hire company for each critical item.
- Check your insurance covers current replacement value.
- Plan replacements for ageing equipment before they fail.
Our one-page business continuity plan includes an equipment section.
Ready to get back up and running?
When the machine that earns your income is out, speed matters — and so does getting the structure right.
A human being, not an auto-dialler, calls to talk it through with you. We won’t pull your credit file just because you asked a question — that waits until you say go. You won’t get a wave of calls from lenders you’ve never heard of, because we don’t pass enquiries around.
Honest, precise answers — the sum, what it pays for, your state, any real estate — mean we can point you in the right direction straight away. Open the enquiry form.
Frequently asked questions
Can I get funding for used equipment from a private seller?
Yes. Unsecured and property-secured funding aren't tied to the asset, so the equipment can come from a dealer, an auction or a private seller. Get an inspection and keep the paperwork.
My insurer will pay for the machine but not for weeks. What can I do?
Fund the replacement now with a short facility and repay it from the payout. Tell your insurer you're replacing the item and confirm it won't affect the claim.
What do I need to apply?
The replacement quote or invoice, recent business bank statements, your ABN or ACN, ID, and details of any property you could use as security for larger amounts. Insurance claim details help too.
How is an insurance payout for destroyed equipment taxed?
The ATO applies balancing adjustment rules to depreciating assets: if the payout exceeds the asset's book value, the excess is assessable income; if it's less, you can claim the difference as a deduction.
Is it better to hire or buy after a breakdown?
Hire protects revenue while you decide and is sensible when the right replacement isn't available immediately. Over a longer period, owning is usually cheaper. Set a decision date so hire doesn't drift on.