Business Finance
Chattel mortgage
explained and arranged.
A chattel mortgage is one of the most commonly used business vehicle and equipment finance structures — but it's worth understanding how it works. We explain the details and find the right lender for your situation.
How a chattel mortgage works
In a chattel mortgage, you take ownership of the asset from day one — the lender takes a "mortgage" (security interest) over it until the loan is repaid. This differs from a hire purchase, where ownership transfers at the end.
For GST-registered businesses, a chattel mortgage can allow you to claim the GST on the purchase price upfront, and potentially claim depreciation and interest as tax deductions. Your accountant will confirm what applies to your specific setup.
We're not tax advisers — we help you find the right lender and structure. Always confirm the tax treatment with your accountant.
You own the asset from day one
Unlike a lease or hire purchase — immediate ownership, with the lender holding security.
Potential tax benefits
GST-registered businesses may claim the GST upfront — confirm with your accountant.
Balloon payment option
Reduce monthly repayments with a residual/balloon — paid or refinanced at term end.
Large business lender panel
We find the lender with the best rate and terms for your business profile.
Who this suits
- GST-registered businesses buying a vehicle or equipment for business use
- ABN holders who want to take immediate ownership of the financed asset
- Business owners whose accountant has suggested a chattel mortgage structure
- Companies, trusts or sole traders wanting a tax-effective finance product
Always confirm the tax implications with your accountant — we arrange the finance, they advise on the tax treatment for your specific situation.
Chattel Mortgage FAQ
Got questions? We've got answers.
Plain English. No jargon. Just the stuff people actually ask us.
What is a chattel mortgage?
A chattel mortgage is a common business finance option where your business buys and owns the asset, while the lender takes security over it until the loan is repaid. It's often used for business vehicles, trucks, trailers, equipment and machinery. We'll explain how it works in simple terms and help compare it with other commercial finance options.
Who can use a chattel mortgage?
Chattel mortgages are generally designed for business-use assets, so they may suit ABN holders, sole traders, companies, partnerships and trusts. The asset usually needs to be used mainly for business purposes. We'll help confirm whether your purchase fits the lender's criteria and whether this structure suits your business.
Do I own the asset under a chattel mortgage?
Yes, in a typical chattel mortgage, your business owns the asset from the start, while the lender holds a security interest over it until the loan is paid out. This can be attractive for businesses that want the asset on their books. We'll also explain your obligations around repayments, insurance and end-of-loan options.
Can a chattel mortgage have a balloon payment?
Yes, many chattel mortgages can be structured with a balloon payment. This can reduce regular repayments, which may help cash flow, but it means there is a lump sum due at the end. We'll help you choose a balloon that feels sensible, not stressful, based on your expected asset value and business plans.
Are there GST or tax benefits with a chattel mortgage?
There may be, depending on your business use, GST registration, asset type and accounting treatment. Many businesses choose chattel mortgage because it can work well with business asset ownership and tax planning. We'll explain the finance structure, and your accountant can confirm the GST, depreciation and deduction treatment for your business.
How is a chattel mortgage different from a lease?
With a chattel mortgage, your business usually owns the asset while the lender has security over it. With a lease, the financier may own the asset and your business pays to use it. Both can be useful, but the right choice depends on cash flow, accounting, tax treatment and ownership goals. We'll help you compare the options clearly.