What Is a Payout Figure on Vehicle & Equipment Finance? (2025 Guide)
Payout figure explained for vehicle and equipment finance – Switchboard Finance
What Is a Payout Figure on Vehicle & Equipment Finance?
“Your payout figure is $43,870.12, valid until 30 November.” Emails like this land in inboxes every day — and most business owners just shrug and assume it’s the “loan balance”. In reality, a payout figure is a specific calculation lenders use when you want to close, refinance or move a loan, and misunderstanding it can cost you thousands.
1. What a Payout Figure Actually Means (Not Just “What You Owe”)
A payout figure is the amount your current lender wants in order to close out a specific finance contract on a particular date. It normally includes the remaining principal, interest up to the payout date, plus any fees the contract allows them to charge when you exit early.
With asset finance, the payout is tied to the exact loan structure you chose — for example, a fixed-term chattel mortgage with a balloon, or a simple principal-and-interest contract on a work ute. Two loans with the same balance can have very different payout figures if the terms, fees or timing are different.
Confusion usually comes from mixing up “account balance” on your statement with a formal payout letter. Balances are a snapshot; payout figures are a settlement amount calculated to a specific day, under the rules in your contract.
You’ve got a ute financed under low doc terms. Your statement says the balance is $38,000. You ask the lender for a payout for 30 June because you want to refinance into a sharper low doc vehicle finance deal. The formal payout comes back at $39,150 — because it includes interest to 30 June plus an early termination fee that doesn’t show on the basic balance.
- Balance = accounting number at a point in time.
- Payout figure = settlement amount on a specific date.
- The gap between the two is usually interest + fees your contract allows.
2. When You Should Request a Payout Figure (and When You Shouldn’t)
You don’t need a payout figure just because you’re curious. Lenders treat it as a signal you’re thinking about exiting the contract, and the figure is normally only valid for a short window. It makes the most sense when you’re selling the asset, refinancing, or restructuring your wider facilities.
If you’re upgrading equipment or moving to sharper equipment finance, a payout lets brokers and new lenders model whether a refinance or top-up is actually worth it after fees. Without it, you’re just guessing off the remaining term and approximate balance.
On the other hand, if you’re only a year into a five-year contract and the loan is performing fine, constantly requesting payout quotes can be a distraction. Those early years are where early termination costs can bite hardest, especially on heavily discounted promo deals.
- You’re selling or trading in the vehicle or machine.
- You’re refinancing multiple contracts into one cleaner structure.
- You’re exiting a short-term deal into a more sustainable facility.
- Your accountant wants to model different scenarios before EOFY.
A civil contractor wants to replace a three-year-old excavator with a new model. Their broker requests a payout from the current lender, then compares three options: refinance the shortfall into the new loan, pay some cash to reduce the shortfall, or move both machines across to a sharper lender tied to a specialist equipment finance policy.
3. How Lenders Calculate a Payout Figure
Every lender has its own internal formula, but the building blocks are similar. Start with the remaining principal, add interest owing up to the payout date, then factor in break costs or early termination fees that are written into the contract.
For vehicle loans, the payout may also need to account for the end-of-term balance on a residual or balloon. If you’re refinancing from one vehicle finance product to another, the new lender will want to know exactly what that figure is so they can decide whether to fund it, clear it, or leave it to be paid in cash.
Fixed-rate contracts that were heavily discounted up front can attract extra “economic costs” when you leave early. That’s why two loans with the same payment history can have very different payout behaviour when you try to exit at year three instead of term five.
- Start with principal remaining on the schedule.
- Add interest from your last repayment date to the payout date.
- Add break costs or admin fees allowed under the contract.
- Include any residual or lump sum due at the end of term.
A transport business has a truck loan with a big balloon due in 18 months. They ask for a payout because they want to refinance the truck and add another one, using a sharper lender and a cleaner structure. The payout includes that future lump sum as if it were due today, so the broker structures the new package using a mix of business loans and truck finance, instead of pretending the balloon doesn’t exist.
4. Using Payout Figures Safely: Refinance, Upgrades & Cash Flow
A payout figure is a tool, not a green light to refinance everything on sight. The number should feed into a bigger decision: will your monthly commitment, tax position and future plans actually be better after the move? That means lining the payout up with the new structure, not just shopping for a lower headline rate.
When we review payouts for clients, we compare the “do nothing” case with options that use low doc working capital loan facilities, sharper asset finance, or a mix of both. Sometimes the smartest move is to leave a perfectly fine truck loan alone and instead shore up cash reserves with a separate facility.
The best approach is to treat payout figures as part of a wider funding system — especially if you’re running multiple vehicles, machines or locations. That’s where a mix of asset finance, business line of credit strategies and working capital can all work together.
A growing plumbing business had four different vehicle loans with three lenders, plus a short-term cash advance. We obtained payout figures on each contract, then mapped a refinance plan that moved them into a consolidated low doc asset finance structure and a separate business line of credit for ongoing expenses. Monthly repayments dropped, and the owner knew exactly what each product was doing.
- Get written payout figures for each loan you’re thinking about moving.
- Model “stay vs switch” over the remaining term, including tax effects.
- Build a clean structure that separates asset purchases from day-to-day funding.
We regularly review payout figures for owners before they refinance fleets, upgrade clinic equipment or reshuffle café fitouts. By combining tools like working capital loans, invoice finance and asset facilities, we can usually keep the total funding cost steady while making repayments smoother.
5. Payout Figures – Common Questions Business Owners Ask
These are the questions we hear most often when clients receive a payout quote on an existing contract. Each answer links to a glossary term if you want the deeper definition.
Yes. With a chattel mortgage, the payout usually reflects the remaining principal, interest to the payout date and any early termination fees in your contract. With finance leases or operating leases, the payout may also factor in the lender’s view of the asset’s future sale value and any contractual end-of-term obligations, so quotes can behave differently even if the repayments look similar.
If your loan has a balloon payment, it’s normally treated as part of the amount needed to fully clear the contract, so it will be captured in the payout figure. When refinancing, the new lender can either fund that lump sum into the new deal, or structure things so you pay some of it out of pocket to keep future repayments sensible.
Early in the term, more of your repayment is going to interest and less to principal, and some contracts front-load fees as well. If your agreement also has a residual value or minimum term, the lender may calculate the payout as if those future amounts are due now. That’s why it’s important to get a written quote and not just assume that “two years in” means you owe roughly three-fifths of the original amount.
Often, yes — many owners refinance an existing payout into a new facility when upgrading or restructuring, especially if they’re trying to stabilise cash flow. The key is to avoid stretching the new term beyond the realistic life of the asset, and to make sure you’re not stacking short-term fixes on top of each other. A good broker will show you the long-term cost, not just the lower monthly repayment.
Not always. If the asset loan itself is fine and you’re mainly struggling with timing on invoices or seasonal sales, tools like invoice finance or separate working capital facilities may be better than touching a solid asset contract. We often recommend leaving good loans alone and instead using products designed specifically to cover timing gaps in revenue.
