Private Sale Used Machinery Finance (2026)Manufacturer Edition
Private sale used machinery finance for manufacturers | Switchboard Finance
🧱 private sale · used machinery · manufacturer edition ·
Business Owners Finance Hub · 2026
Buying used plant via Private Sale can be a bargain — and still get “haircut” by a lender. Not because manufacturing is risky, but because private sale deals are harder to verify fast.
This guide is the proof-first version: what documents stop valuation cuts, how to show GST/price properly, and how to avoid related-party shortcuts that create conditions. If you want the broader approval playbook, start with: Equipment Finance Application Mistakes and the “are you ready?” baseline: 11 Signs You’re Ready for Asset Finance.
Most manufacturer buyers land in one of two lanes: Equipment Finance (single machine) or Low Doc Asset Finance (bundled upgrades). If you’re deciding structure first, read: Lease vs Buy Equipment.
1) Why private sale gets valuation “haircuts” (and what fixes it)
Valuation haircuts happen when the lender can’t confidently verify price, condition, and resale reality. With private sale, there’s usually no dealership trail, no standard invoice format, and inconsistent asset details.
The consequence is simple: the lender protects themselves by valuing conservatively. That usually means higher deposit requirements or a smaller approval than you expected.
The fix is not “more paperwork” — it’s the right proof, sent in the right order. Use this table as your quick map.
| Proof item | What it proves | What happens if it’s missing |
|---|---|---|
| Itemised purchase summary | Exact machine details + inclusions (tooling, manuals, spare parts) | Asset becomes “generic” → conservative valuation |
| Photos + serial/model evidence | It’s real, identifiable, and matches the description | Extra conditions and slower credit sign-off |
| Comparable market context | Price is reasonable for age/spec | Valuation haircut increases (especially if “too cheap”) |
| Ownership + encumbrance checks | Seller actually owns it and it’s clean | Approval pauses until risk is cleared |
2) GST + price proof (the part that quietly stalls approvals)
Private sales are messy because GST treatment and documentation vary by seller (business vs individual). Lenders don’t want to guess — they want a clean record trail that matches the purchase story.
The consequence of unclear GST proof is conditions: more emails, more time, and sometimes a revised structure. If your purchase documentation doesn’t show GST clearly, approvals slow down even when the borrower is strong.
The “clean” move is to standardise your proof pack so it reads like a dealer deal — without pretending it is one. Here’s the manufacturer-friendly checklist.
- Seller invoice format: if the seller can issue a Tax Invoice, it removes ambiguity fast.
- GST position clarity: confirm whether the sale includes GST (and show it explicitly if it does).
- Payment trail: bank transfer screenshot/receipt (so the lender can match price to proof).
- What you’d have in a dealer deal: a clean purchase summary that mimics a Dealer Invoice style breakdown (machine + inclusions).
For what lenders fund (and what they don’t), align your request with: 7 Business Costs You Can Finance. For official GST and record guidance, start at ato.gov.au.
3) Related-party traps (where “easy” deals become hard)
Related-party private sales are common in manufacturing: mates, ex-partners, family businesses, or a director selling an older machine into a new entity. The lender’s concern isn’t morality — it’s whether the deal is arm’s length and properly documented.
The consequence of a “handshake transfer” is severe: valuations get conservative, lenders ask for extra proof, or the file gets redirected into a slower assessment lane. If the paper trail looks like an internal shuffle, the lender treats it as higher risk.
The fix is to make the transaction look like a real commercial sale with clean ownership proof and a transparent price story. Here’s the exact proof set that reduces friction.
- Ownership verification: run a PPSR Check early so there’s no “who owns what?” debate.
- Price justification: 2–3 comparable listings or a short valuation rationale.
- Clear repayment fit: show why repayments work based on production cycle (avoid “it’ll be fine”).
- Simple relationship disclosure: one paragraph describing the relationship and why the price is fair.
4) Submission order (how to get to “yes” without the back-and-forth)
With private sale, the order you submit documents matters more than the number of documents. If the lender sees the price before they can verify the asset, you trigger questions.
The consequence is predictable: conditions stack up, valuation turns conservative, and you lose time while the seller gets impatient. Use a clean sequence that lets the lender “tick” each risk quickly.
This is the simplest sequence manufacturers should follow for private sale machinery. Keep it boring and complete.
- Step 1: Asset ID pack (photos + model/serial + inclusions) + purchase summary.
- Step 2: Price/GST proof pack + payment trail.
- Step 3: Trading/repayment story backed by Bank Statements.
- Step 4: Risk clearance (ownership + relationship disclosure if related-party).
If you want speed mechanics (what “fast” actually means lender-side), read: Fast-Track Asset Finance.
Private sale used machinery gets haircut when lenders can’t verify the asset, the price, and the GST story quickly. Fix it with an “asset ID first” pack, clear GST/price proof, and a transparent related-party disclosure when needed.
Start in the right lane: Equipment Finance for single machines, or Low Doc Asset Finance when you’re bundling upgrades. If the upgrade is part of a bigger cashflow plan, use: Business Loans.
FAQ
Unclear risk sizing — the lender can’t tell whether the loan-to-value fits the asset category and condition. Tight asset proof reduces conservative assumptions around LVR. If you skip it, the consequence is usually a smaller lend or a deposit request.
Yes — the lender’s risk questions vary by Asset Type (resale market, installation complexity, condition sensitivity). If the type is unclear, the consequence is extra conditions or a conservative valuation.
It can be — because dealer paperwork is standardised and private sale paperwork often isn’t. When terms are unclear, the lender asks more questions about the Facility structure and proof trail. The consequence is slower approvals unless you standardise the pack.
Because the lender needs a clear “who carries the risk if it goes wrong” story. Related-party deals often bring questions around Director’s Guarantee and ownership/benefit. If the relationship isn’t disclosed cleanly, the consequence is delays or conservative terms.
Your fastest outcomes happen when you submit a complete pack early and align expectations around Fast Approval. If you drip-feed documents, the consequence is back-and-forth that turns a quick decision into a multi-day process.
Disclaimer: This content is general information only and isn’t financial, legal, or tax advice.
