Finance question
What is a chattel mortgage?
A chattel mortgage is a common way to finance a business asset where you own it from day one and the lender holds security over it until the loan is paid off. The chattel is the asset itself, like a vehicle or machine. Once the finance is cleared, the security is removed and the asset is fully yours.
Get your free rate quote
Tell us a few details and we will come back with your indicative rate. No obligation.
Thanks, we are on it
Your enquiry is in. Our team will be in touch shortly with your indicative rate and next steps.
The short answer
You own it, the lender holds security
A chattel mortgage is one of the most widely used structures for financing business equipment in Australia. The word chattel simply means a movable asset, such as a vehicle, truck or machine. You take ownership of that asset straight away, and the lender registers security over it, which is released once the loan is fully repaid.
Because you own the asset from the start, it sits on your books as yours while the finance runs alongside it. This ownership from day one is the main thing that sets a chattel mortgage apart from a lease, where you pay to use an asset that stays owned by someone else until any final option is exercised.
It is a clean, straightforward structure that suits businesses buying gear they intend to keep. Tax treatment for a chattel mortgage differs from a lease and depends on your circumstances, so that is one for your accountant. What we do is place the deal with the right lender across 40+ and structure it to fit how the asset earns.
Do you qualify?
When a chattel mortgage fits.
You want to own it
Gear you intend to keep suits ownership from day one.
A specific asset
A vehicle, truck or machine that secures the finance.
An active ABN
Sole traders and companies both qualify.
Business use
The asset is used mainly for business purposes.
Why businesses choose it
Ownership from day one
The asset is yours from the start, with the lender holding security until it is paid.
Secured, so competitive
Because the asset secures the loan, pricing reflects that security.
Clean once cleared
When the loan is repaid, the security is removed and the asset is fully yours.
A real example
A landscaper buys a $50,000 tipper under a chattel mortgage. The truck is theirs from day one and goes straight to work, while the lender holds security over it. Repayments run over the term, and once cleared the security is released, leaving the business owning the truck outright. Illustrative only.
Common questions
Frequently asked questions
Do I own the asset with a chattel mortgage?
Yes, from day one. The lender holds security over it until the loan is repaid, then that security is removed.
How is it different from a lease?
With a lease you pay to use an asset owned by someone else. With a chattel mortgage you own it straight away and the lender only holds security.
Can I have a balloon on a chattel mortgage?
Often yes. A balloon can lower your regular repayments, with a lump sum left owing at the end of the term.
What are the tax implications?
Treatment differs from a lease and depends on your circumstances. Your accountant is best placed to confirm; we structure the finance to suit.