Chattel Mortgage Finance for Australian Businesses

Own the Asset From Day One.

A chattel mortgage is the most common way Australian businesses fund vehicles, machinery and equipment.

You take ownership of the asset the day it settles, the lender registers security over it until the loan is repaid, and if you are registered for GST you can generally claim the input tax credit back on your next BAS.

We work with 50+ lenders to structure chattel mortgages across every asset class, with fast approvals on straightforward files.

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How a Chattel Mortgage Works

A chattel mortgage has two parts. The chattel is the asset itself, whether that is a ute, an excavator or a CNC machine. The mortgage is the security interest the lender registers against it on the PPSR. You own the asset from settlement, the lender simply holds security until the balance is cleared, and once the final payment lands the security is released and the asset is yours outright.

Rates and terms are fixed. Terms usually run 1 to 7 years, and monthly repayments are the default though some lenders will structure weekly or fortnightly, or align repayments to seasonal cash flow if the business needs it.

The part that matters most to borrowers is the balloon. A balloon is a lump sum deferred to the end of the term, and it lowers the monthly repayment across the life of the loan. On a five year term you can go as high as 40 percent, with shorter terms generally supporting a higher percentage again. Not every asset supports a balloon at the top of that range. Lenders set it against what they expect the asset to be worth at the end of the term, so a late model vehicle carries a bigger balloon than an older machine with a thinner resale market.

The GST treatment is the other reason businesses choose this structure. Because you take ownership up front, the GST on the purchase price is generally claimable as an input tax credit in the BAS period the asset is acquired, rather than being spread across the repayments the way it is on a lease. The repayments themselves are then GST free. How that lands for your business depends on your accounting basis and your circumstances, so confirm it with your accountant before you sign anything. We structure the finance, they structure the tax position.

What You Can Finance With a Chattel Mortgage

Almost any asset a business buys for business use. We write chattel mortgages across vehicle finance, machinery finance and equipment finance, from a single ute through to multiple prime movers or a yard full of plant.

Common assets include utes, vans, prime movers and trailers, excavators, skid steers, forklifts, agricultural machinery, manufacturing plant, medical and dental equipment, and IT and fit out packages.

New and used both work. Age is not a hard cut off the way borrowers expect it to be. It depends on the lender and on the asset, and specialist lenders will run longer terms on older gear where the asset genuinely holds its value. A twelve year old excavator with hours on the clock and a strong resale market is a very different conversation to a twelve year old passenger vehicle, and different lenders will look at those two files completely differently. That is the part a broker sorts out before anything goes to credit.

Dealer sales are the cleanest path. Private sales and auction purchases are absolutely doable and we write them regularly, they just carry a few more steps: a PPSR search to confirm the asset is clear, verification of the seller, an inspection or valuation depending on the asset and the amount, and a payout letter where there is existing finance sitting against it. More steps than a dealer sale, not onerous, and worth it when the private buy is the better purchase.

Loan sizes typically run from $20,000 up past $1 million, and we structure multiple assets under one facility where a business is buying several things at once.

Why Use a Broker for a Chattel Mortgage

Every lender will write a chattel mortgage. That is not the differentiator. What separates them is balloon appetite, how they treat used and older assets, how they handle private sales, whether they will look at a low doc file at the size you need, and how they price a repeat client against a new one.

A bank will assess your file against one set of policies and give you one answer. We know which of our 50+ lenders will say yes to your specific asset, your ABN age and your structure before anything is submitted, so you are not collecting declines and marking up your credit file while you work it out.

The balloon is where a broker earns the fee twice. Setting it at the right level at the start is one job. Getting it refinanced cleanly at the end is the other, and it is the part borrowers do not plan for. Handled properly the refinance lands at a similar rate and a similar monthly repayment, so the client barely feels the transition. Lenders are generally very happy to refinance a balloon they wrote themselves, because they already know the asset and they already know the payment history. Knowing that in advance changes how aggressively you can set the balloon on day one.

Who a Chattel Mortgage Is For

Any ABN holder buying an asset predominantly for business use. Sole traders, partnerships, companies and trusts all qualify, and we write files across construction, civil, transport, agriculture, manufacturing, trades, medical and professional services.

Being registered for GST is where the structure really earns its keep, because that up front input tax credit is the main advantage over a lease. You can still take a chattel mortgage without being GST registered, you just lose that particular benefit.

Established businesses with clean payment histories get the widest choice of lenders and the sharpest structures. Newer ABNs are still very placeable, particularly where the asset is strong, there is a deposit, or the director has property behind them.

Low doc chattel mortgages are available where you would rather not hand over full financials. Limits sit around $250,000 for new clients, and repeat clients with twelve months or more of clean payment history with a lender can often be extended to $500,000 without full financials. That second number surprises people, and it is one of the strongest reasons to keep your finance running through one broker rather than shopping every purchase around. The relationship compounds.

If the funding you need is not tied to an asset at all, that is a different conversation and it sits under business finance or a straight business loan instead.

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We compare chattel mortgage structures across 50+ lenders and come back with the options that actually fit your business, with no obligation.

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Getting a Chattel Mortgage

Step 1: Tell us about the asset and the business

What you are buying, roughly what it costs, whether it is coming from a dealer or a private seller, how long the ABN has been running and whether you are registered for GST. Five minutes on the phone covers it.

Step 2: We structure it and place it

We work out the term, the balloon and the repayment structure that suits your cash flow, then match the file to the lenders most likely to approve it at the sharpest terms. Straightforward files are approved in 24 to 72 hours.

Step 3: Settlement

We handle the documents, the PPSR checks and the payment to the seller. Dealer purchases usually settle within 24 hours of approval. Private sales take a little longer while inspections and payout letters come through.

Business Overdraft FAQs

What is a chattel mortgage?

A chattel mortgage is a commercial loan used to buy an asset for business use. You own the asset from settlement, and the lender registers a security interest over it until the loan is repaid. It is the most common structure used for business vehicle, machinery and equipment finance in Australia.

What does chattel actually mean?

Chattel is an old legal term for moveable property, meaning anything that is not land or a building. In this context the chattel is the asset being financed, whether that is a vehicle, a machine or a piece of equipment. The mortgage is the security the lender holds over it.

How is a chattel mortgage different from a car loan?

Mechanically they are very similar. The difference is purpose. A chattel mortgage is a commercial facility for assets used predominantly in a business, so it is assessed on the business rather than under consumer credit rules, and it carries the GST and tax treatment that comes with commercial finance. A consumer car loan is for personal use and does not.

Can I claim the GST on a chattel mortgage?

If your business is registered for GST, the GST on the purchase price is generally claimable as an input tax credit in the BAS period the asset is acquired, and the repayments themselves are GST free. How this applies to your specific situation depends on your accounting basis and circumstances, so confirm it with your accountant.

Can I claim the interest and depreciation?

Generally the interest charges and the depreciation on the asset are deductible to the extent the asset is used for business, and passenger vehicles are subject to the ATO depreciation limit. This is your accountant's territory rather than ours, and it is worth a conversation with them before you settle.

What is a balloon payment on a chattel mortgage?

A balloon is a portion of the loan deferred to the end of the term as a single lump sum. It lowers your monthly repayments across the life of the loan. On a five year term the balloon can go as high as 40 percent, with shorter terms generally supporting a higher percentage.

What happens at the end of a chattel mortgage term?

If there is no balloon, the loan simply finishes and the security is released. If there is a balloon you have three options: pay it out, refinance it, or trade the asset in and roll into a new facility. Most clients refinance, and it is usually straightforward.

Can I refinance the balloon at the end?

Yes, and it is common. Handled properly the refinance comes in at a similar rate and a similar monthly repayment to what you were already paying. Lenders are generally very willing to refinance a balloon they wrote themselves, because they already know the asset and your payment history.

What terms are available on a chattel mortgage?

Terms typically run 1 to 7 years. Five years is the most common on vehicles and light commercial assets. Heavier machinery and equipment can sometimes run longer with the right lender where the asset supports it.

What rates apply to a chattel mortgage?

Rates vary with the asset type, its age, the loan size, the term, the ABN age and the strength of the business. New assets bought from dealers by established businesses attract the sharpest pricing. Older assets, private sales and newer ABNs price higher. We compare across 50+ lenders and come back with the actual number for your file rather than an advertised headline rate.

Can I get a chattel mortgage on a used asset?

Yes. There is no universal age cut off. It depends on the lender and on the asset, and specialist lenders will write longer terms on older gear where the machine still holds genuine value. Assets with strong resale markets and comparable sales data get more latitude than assets that depreciate quickly.

Can I use a chattel mortgage for a private sale or an auction purchase?

Yes, we write these regularly. There are a few more steps than a dealer sale: a PPSR search, seller verification, an inspection or valuation depending on the asset and the amount, and a payout letter where there is finance already against it. Not onerous, just a slightly longer runway to settlement.

Do I need to be registered for GST?

No. You need an ABN and the asset needs to be predominantly for business use. Being registered for GST is what unlocks the input tax credit benefit, which is the main advantage of this structure over a lease, so without it the comparison between structures changes.

Can I get a low doc chattel mortgage?

Yes. Low doc limits sit around $250,000 for new clients. Repeat clients with twelve months or more of clean payment history with a lender can often be extended to $500,000 without full financials. Requirements vary by lender and generally involve ABN and GST registration age, and sometimes property ownership.

How long does a chattel mortgage take to settle?

Straightforward files are approved within 24 to 72 hours. Dealer purchases usually settle within 24 hours of approval. Private sales and larger or more complex files take a few days longer while inspections and payout figures come through.

Ready to Set Up a Chattel Mortgage?

Call 0416 960 969 or send through the form below and we will come back to you the same business day with the options that suit your asset and your business.