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Chattel Mortgage | Commercial Lending Australia

Chattel Mortgage is an extremely popular and very commonly used commercial loan as it suits many businesses and the purchase of many goods and assets. Due to its popularity and relatively straightforward format, Chattel Mortgage is offered for a range of purposes by all major Australian banks and many lenders either directly or through brokers.

Business Finance Chattel Mortgage | Commercial Lending Australia
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Rate Comparison
Compare Chattel Mortgage Interest Rates with Other Finance Products

Chattel is just one of several finance facilities available to commercial operators. This table displays the rates we are achieving across our portfolio and allows users to compare interest rates and estimated repayments when financed with different loans. Compare this lending type with Leasing, CHP and Rent-to-Own. Enter the amount and term of your loan and the function automatically displays the repayment estimate.

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Disclaimer: This comparison table is provided solely for the purpose of comparing interest rates currently being achieved on different lending facilities. It is to be used as a reference only. All the fees and charges which may apply to a loan by lenders and brokers may not be accounted for in the calculations. Any loans you may be offered may attract a different interest rate and a different repayment. Use of this device is not an application, calculating a repayment estimate does not represent an offer or approval of any loan.

29 September

Today's best rate

Finance Equipment From

4.99 % Fixed

* The interest rate is calculated on a secured loan for commercial use, effective 29/09/2023 and subject to change. Warning: the interest rate is only true for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

29 September

Today's best rate

Finance Equipment From

4.99 % Fixed

* The interest rate is calculated on a secured loan for commercial use, effective 29/09/2023 and subject to change. Warning: the interest rate is only true for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

What Does Chattel Mortgage Mean?

What Is A Chattel Mortgage?
What Is A Chattel Mortgage?

To simplify the process of sourcing the best loans for your organisation, we offer quick access to a wide range of banks, lenders.

  • All Major Banks
  • Large Number of Leading Lenders
  • Specialist Lenders for Specialist Sectors

Chattel Mortgage is flexible which in most cases, can be tailored to provide businesses with a workable, cost-effective solution.

Calculator
Chattel Mortgage Calculator

This calculator allows for not only generating repayments but also structuring lending with your preference of inclusions. It has the inclusion of a balloon/residual to allow for increased computational functionality.

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Chattel Mortgages Benefit Businesses in All Industries.

Process
Suits Many Businesses in All Industries

Chattel Mortgage is suited to many types of commercial structures, but it is advisable to consult with your accountant as to whether or not this is the best option for you.

  • Small Businesses
  • SMEs
  • Sole Traders
  • Partnerships
  • Owner-Operators
  • Family and Unit Trusts

Whatever industry sector you operate in, Chattel Mortgage may present a cost-effective commercial loan type.

Features
Flexible Chattel Mortgage Loans for Many Purposes

  • The lender uses the asset/goods as security against the loan and the borrower makes monthly payments to repay the loan.
  • The goods are referred to as ‘chattel’ in the loan contract and the lender effectively takes a mortgage over the goods until the borrower has finalised all payments.
  • The borrower takes ownership of the goods at time of purchase (when the loan contract is finalised).
  • Borrower is responsible for ongoing expenses, maintenance and other costs associated with the ownership of the goods over the loan term. For a vehicle or boat this would include rego, insurance, servicing etc.
  • Simple loan structure – fixed loan term, fixed interest rate, fixed monthly payments, option for a balloon.
  • The loan term will depend on the lender and the goods. From as low as 2 years up to 7 years for equipment and trucks.
  • Balloon payment is optional. This is a percentage of the purchase price which is deferred for payment at the end of the loan term, when all monthly repayments have been finalised. The balloon can be paid as a lump sum or in some cases, refinanced.
  • Suited to cash accounting method
  • GST on the purchase price can be claimed on the next BAS
  • GST is not charged/claimable on the interest or the principle component of the monthly repayments or the balloon as it has already been claimed at time of purchase.
  • GST is charged on any fees and charges in monthly repayments. This will be noted in the loan contract.
  • Only the interest component of the monthly repayment is tax deductible.
  • Depreciation is claimable in accordance with the ATO guidelines for the relevant asset category.
Appropriate Gear for Lease with Ownership Option

wide range
Suitable equipment for rent to own

A wide range of equipment loans is suited to Rent to Own. The determining factor as to whether or not this is the most suitable loan facility for your venture will be aspects of your commercial set-up. Referring to your accountant for advice in this regard is highly recommended. Some lenders will have limitations on what equipment financing they will approve, predominantly in terms of age and condition. If you are seeking funding on used equipment, use our services to compare the market with many lenders and banks that will be best suited to your requirements.

Range of Commercial Purchases
Sourcing a Chattel Mortgage

Due to the popularity and flexibility of Chattel Mortgage, it is highly competitive funding. All major banks offer Chattel Mortgage for a range of commercial purchases, and there are even more non-bank lenders offering, in some cases, even more competitive deals.

Selecting the lender that best suits you and your purchase may require some research. If you operate in a specialist sector, a lender that specialises in your industry may offer you the best deal.

Using the services of a broker may offer significant benefits over sourcing equipment finance yourself. We have access to a large number of lenders and the expertise to negotiate the best rates and deals.

We provide a wide range of choices and offer direct access to lenders.

Connect with us for lenders that may assist you today.

Finding Chattel Mortgage Solutions

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FAQ's
Chattel Mortgage Financing

This is a very popular form of lending due to its suitability for many commercial structures and its flexibility to suit many asset purchases. To expand on the detail provided on our web page, we have included these direct answers to specific questions. To answer any more of your questions, please reach out to our team.

Chattel Mortgage is a versatile financing that can be used for the purchase of a wide range of commercial assets. It is suited to all types of motor vehicles, including dual cab utes, SUVs, executive cars, luxury vehicles, trucks, and light commercial vans. All commercial equipment can be financed with a Chattel Mortgage, subject to ATO approval of the equipment as a legitimate asset.

Chattel Mortgage suits many commercial structures, including SMEs, corporations, partnerships, family enterprises, sole traders, and ABN holders. The suitability of this financing is primarily associated with the accounting method used. This form of finance is best suited to operations that use the cash accounting method.

The balloon is a portion of the loan amount that is set aside for payment at the end of the term. It can be represented as a percentage of the loan amount or as a fixed dollar amount. The balloon is due to be paid after all the monthly payments are finalised. Interest is charged on the balloon.

Yes. The interest portion of the monthly repayments can be claimed by as a tax deduction when the annual accounts are prepared by the accountant. The capital repayment portion of the monthly payments is not deductible.

The size of the balloon would be subject to lender approval. When processing the finance application, lenders would take into account many aspects of the credit profile and creditworthiness of the business in approving the finance terms and conditions requested. A larger balloon reduces the monthly payments but the loan attracts a larger amount of interest compared with a smaller balloon. A smaller balloon results in larger monthly commitments but less total interest payable.

Yes. Chattel Mortgage is a secured financing which can suit many businesses including small and micro operations. As with all finance applications, the applicant must have an ABN and identification. Lenders also request a range of financial documentation as part of the application.

The finance term for Chattel Mortgage will be subject to lender approval. Terms of up to 7 years are available with some asset finance. A longer term may suit equipment and machinery with a high dollar purchase price. Shorter terms of 4-5 years are typically selected on acquisitions of motor vehicles. A longer term reduces the monthly repayment but attracts a higher total interest payable compared with a shorter term. A shorter term allows the commitment to be finalised earlier.

Chattel Mortgage is a secured funding where the goods being purchased are accepted as the security against the funds being loaned. This may be a motor vehicle, truck or business equipment. Acceptance of the goods as suitable security is subject to lender approval. No additional security or guarantee may be required but that is subject to lender approval. In some instances the lender may request additional security be provided.

The balloon amount is due to be paid in full at the end of the finance term. When the final monthly payment is made, the balloon is due for payment. The way the payment is a decision for the individual. Funding may be applied for to pay the balloon payment. The finance application would be processed, the current interest rate would apply, and the goods would be considered as used.

The monthly payments for Chattel Mortgage are not fully tax-deductible. The interest component of the repayment is deductible, as well as lender fees and charges. However, the remaining portion is not tax-deductible. The tax deduction derived from this financing is through depreciation of the asset.

The GST applicable to the purchase of the goods can be claimed on the corresponding BAS return. The full amount of GST is immediately claimable by businesses that are registered for GST immediately following finalisation of the purchase and finance. No GST is charged on the interest on the loan.

Yes, the ownership of goods purchased with this funding is immediately transferred to the buyer. As such, the buyer must record the goods in the accounting books as an asset/liability.

On settlement of the finance contract and the purchase of the asset, the ownership is transferred to the entity acquiring the goods. The goods serve as security for the funding. The entity is responsible for all costs associated with the ongoing running costs, maintenance, and repair of the goods.

The tax benefit realised with this financing is achieved through depreciation of the asset. The repayments are not tax deductible. The asset is entered into the balance sheet of the entity and is depreciated each year following the relevant ATO depreciation schedule and taxation laws.

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Our Lenders

Trusted by 60+ lenders Australia-wide

Westpac
Liberty
Automotive Financial Services
Macquarie
Finance One
Commonwealth Bank
Pepper Money
Morris
National Australia Bank
RACV
Get Capital
Prospa
Grow
Selfco Leasing
Scottish Pacific