Chattel Mortgage Australia
Own your asset from day one. Maximise tax benefits.
A chattel mortgage is the most popular finance structure for Australian businesses purchasing equipment, trucks, and vehicles. Own the asset immediately, claim the GST upfront, and deduct interest payments. Flash Funding compares 40+ lenders to find your best chattel mortgage rate.
Start with the best matching product path, then continue via the secure customer portal.
What Is a Chattel Mortgage?
A chattel mortgage is a type of business finance where you borrow money to purchase an asset (the "chattel"), and the asset itself is used as security for the loan. You take ownership of the asset from day one while making regular repayments over an agreed term.
Unlike a lease where the lender owns the asset, with a chattel mortgage, the business owns the equipment or vehicle from the moment of purchase. The lender holds a "mortgage" over the chattel (the asset) as security until the loan is fully repaid.
Chattel mortgages are the most widely used form of commercial asset finance in Australia. They are suitable for any GST-registered business purchasing equipment, vehicles, machinery, trucks, or other business assets. The combination of immediate ownership, GST benefits, and interest deductions makes this structure the first choice for most ABN holders.
How Does a Chattel Mortgage Work?
The process is straightforward. You choose the asset you want to purchase — whether it is a truck, excavator, medical equipment, or any business asset. Flash Funding then arranges the finance by comparing offers from over 40 lenders.
Once approved, the lender pays the supplier directly. You take delivery and ownership of the asset immediately. You then make regular repayments (usually monthly) over an agreed term, typically 2 to 7 years.
At the end of the term, you can set a balloon payment (also called a residual value). This is a lump sum due at the end of the loan. Setting a balloon reduces your monthly payments during the term but means you pay a larger amount at the end. Many businesses refinance the balloon or pay it from business cashflow.
Tax Benefits of a Chattel Mortgage
The tax benefits of a chattel mortgage are a major reason for its popularity with Australian businesses. Because you own the asset, you can claim depreciation deductions. The interest component of your repayments is also tax deductible.
For GST-registered businesses, one of the most significant advantages is the ability to claim the GST on the purchase price as an input tax credit in the next Business Activity Statement (BAS). On a $100,000 asset, this means getting approximately $9,091 back from the ATO — a substantial cashflow benefit.
It is important to note that the chattel mortgage repayments themselves are not tax deductible — it is the interest and depreciation components that create the deductions. Your accountant can advise on the specific tax benefits for your situation.
How It Works
Choose Your Asset
Select the equipment, vehicle, or machinery you want to purchase for your business.
Get Matched
Flash Funding compares chattel mortgage rates from 40+ lenders to find your best deal.
Take Ownership
The lender pays the supplier. You take immediate ownership and delivery of the asset.
Repay Over Time
Make regular repayments over your chosen term while using the asset to generate revenue.
Key Benefits
Claim GST Upfront
Claim the full GST on the purchase price in your next BAS. Significant cashflow benefit.
Immediate Ownership
You own the asset from day one. It appears on your balance sheet as a business asset.
Interest Deductions
The interest component of your repayments is tax deductible as a business expense.
Flexible Terms
Choose terms from 2 to 7 years with optional balloon payments to reduce monthly costs.
Eligibility Requirements
Example Finance Scenario
A plumbing company purchases a new Toyota HiLux SR5 for $65,000 (including GST) using a chattel mortgage.
Asset Price
$65,000
GST Claimed
~$5,909
Term
5 years
Monthly Payment
~$1,150
The business claims ~$5,909 GST back in their next BAS. Interest and depreciation are tax deductible throughout the term.
Frequently Asked Questions
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