A chattel mortgage is a business loan used to purchase a moveable asset (a 'chattel'), like a car or equipment. The lender provides the funds to buy the asset, and you take ownership immediately while the lender holds a security interest over it until the loan is repaid. It is a type of chattel loan.

Yes, it is a type of secured business finance. The asset you are purchasing acts as the security for the loans, which is why costs are generally lower than for unsecured business loans.

Yes. Sole traders, as well as companies and trusts, can apply for a chattel mortgage, provided they have an active ABN and can show enough business income to service the loan.

For a well-prepared application with all required documents, approval can be granted in as little as 24 to 48 hours. This is much faster than traditional bank loans.

Yes, most lenders offer funding for assets being purchased from dealerships, auctions, or through a private sale. The lender will verify the asset and seller details as part of the approval process.

The lender purchases the asset and leases it to you for an agreed period. You make regular lease payments, but the lender retains ownership. At the end of the term, you typically have the option to purchase the asset for its residual value, extend the lease, or upgrade. This can be beneficial for businesses that want to preserve capital.

This is a long-term rental agreement. The lender owns the asset, and you pay to use it for a fixed term. Lease payments are often treated as an operating expense, and there is usually no option to purchase the asset at the end. This is ideal for assets that quickly become outdated or for businesses that prefer not to have assets on their balance sheet.

Similar to a chattel mortgage, you will eventually own the asset, but the ownership structure differs. The lender buys the asset, and you hire it from them while making regular payments. You only take official ownership of the asset once the final payment has been made. Tax implications also differ, particularly in how GST is claimed.

If maximising tax deductions through GST claims and depreciation is your main goal, a chattel mortgage is almost always the superior option. If you prefer lower upfront costs and the flexibility to upgrade equipment regularly, a lease might be more suitable. It is always recommended to speak with your accountant to discuss the tax implications of each option.

A key tax benefit is the ability to claim the full GST paid on the asset's purchase price in your next Business Activity Statement (BAS). Additionally, you can usually claim depreciation on the asset and the interest portion of the loan payments as tax deductions. It is always best to speak with your accountant for tailored financial advice.

Once the final payment is made, including any balloon payment, the lender removes their security interest from the asset. At that point, you own it outright with a clear title.

Yes, securing finance with bad credit is achievable. While major banks may decline, many specialist lenders focus on your recent business performance rather than historical issues. As long as you can demonstrate strong current revenue and past defaults have been resolved, there are viable pathways to approval. However, you should expect to pay a significantly higher interest rate to account for the increased risk to the lender.

A standard car loan is for personal use, whereas a chattel mortgage is a business loan. The structure is designed for commercial use, allowing businesses to claim GST and other tax deductions that are not available with a personal loan. This is a key difference of a mortgage chattel finance agreement.

In many cases, you can finance 100% of the car's purchase price with no deposit. However, providing a deposit can reduce your payments and may help you secure a lower interest cost as it lowers the lender's risk.

Yes, you can usually pay off a chattel mortgage before the end of the term. However, you should check the loan contract for any potential early repayment fees, which some lenders charge to compensate for lost interest.

Typically, you will need proof of identification (like a driver's licence), your ABN, recent bank statements (3-6 months), and potentially your latest Business Activity Statements (BAS). For larger loans, full financial statements may be required.

The interest rate is determined by several factors, including your credit score, how long your business has been operating, your annual revenue, the age and type of the asset, and the loan amount and term.