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The ute is sitting on the dealer’s lot with your name on it, and the asset is earning nothing while the paperwork crawls. A chattel mortgage puts the vehicle or equipment in your business’s name from day one, with the loan secured against it and repayments structured around how you actually trade.
A chattel mortgage is a commercial finance product used to purchase a business asset, where the asset itself, the chattel, secures the loan. Your business takes legal ownership at settlement. The lender registers a security interest on the Personal Property Securities Register, and that interest is discharged once the loan is repaid in full.
Because ownership sits with the business from the outset, the asset appears on your balance sheet and is typically treated as a purchase for tax purposes. That treatment is what makes the structure attractive to GST registered businesses on an accrual accounting basis.
If it is tangible, identifiable, and used predominantly for business, it can usually be financed:
You will generally need an active ABN and an asset used predominantly for business purposes. Beyond that, lenders assess trading history, cash flow, credit profile, and the asset itself. Newer businesses, applicants without full financials, and those with impaired credit are not automatically excluded. Low doc options and specialist lenders exist for exactly these situations, though pricing will reflect the additional risk.
Tell us what you are financing and we will come back with structures, indicative rates, and a clear view of the trade offs. Free, no obligation, and no mark against your credit file.
Business owners tend to ask the same questions before committing to a structure. These are the ones that come up most often.
A chattel mortgage is a commercial finance arrangement where a lender advances funds to purchase a business asset, and that asset is used as security against the loan. The business takes ownership of the asset immediately, while the lender registers an interest on the Personal Property Securities Register until the balance is repaid. Once the final repayment clears, the security interest is released and the business holds the asset outright.
Eligibility generally requires an active ABN and the asset being predominantly used for business purposes, typically more than 50 per cent. Lenders will look at trading history, cash flow, credit profile, and the type and age of the asset. Newer businesses and applicants with limited documentation can still qualify, often through low doc arrangements or specialist lenders. Requirements vary between the lenders on our panel, so eligibility is best confirmed on a case by case basis.
Most tangible, identifiable business assets can be financed. Common examples include utes, vans, prime movers, trailers, excavators, forklifts, agricultural machinery, trade tools, commercial kitchen fit outs, medical equipment, and printing or manufacturing plant. The asset needs to be readily valued and able to be registered as security. Assets that are consumable, heavily customised, or difficult to resell may be harder to finance and could suit an alternative product.
The key difference is ownership. Under a chattel mortgage the business owns the asset from settlement and records it on the balance sheet. Under a finance lease the lender retains ownership and the business pays for the right to use the asset over the term. This changes how GST, depreciation, and interest are treated. Which structure works better depends on your accounting method, cash flow, and how long you intend to keep the asset.
Businesses registered for GST on an accrual basis can generally claim the GST contained in the asset purchase price as an input tax credit in the Business Activity Statement for the period the asset is acquired, rather than across the loan term. Interest charges and depreciation on the asset may also be deductible where the asset is used for business purposes. Tax outcomes depend on your circumstances, so speak with your accountant before proceeding.
A balloon, sometimes called a residual, is a lump sum owed at the end of the loan term. Setting a balloon reduces the size of your monthly repayments because part of the principal is deferred to the final payment. It suits businesses that want to protect cash flow or plan to trade the asset in near the end of the term. The trade off is more interest paid overall and a sum that must be refinanced, paid out, or covered by the sale of the asset.
Approval timeframes depend on the lender and the completeness of your application. Straightforward applications with clean credit and standard documentation are often assessed on the same day, and around 95 per cent of applications submitted through Thor Finance are processed within one business day. More complex structures, low doc applications, or unusual assets may require additional review. Settlement typically follows once the supplier invoice and signed documents are returned.
At a minimum, most lenders will want your ABN details, identification, and an invoice or quote for the asset. Full doc applications usually add recent business bank statements, financial statements, and tax returns. Low doc options can rely on alternative evidence such as BAS lodgements or accountant declarations. Asset backed applicants who own property often face lighter documentation requirements. We confirm what each lender needs before submitting so nothing stalls the process.
Requesting an indicative quote through Thor Finance does not affect your credit score. We assess your position and match you with suitable lenders before any formal application is lodged. A credit enquiry is only recorded once you instruct us to proceed with a specific lender, which means you can explore your options and compare structures without leaving a footprint on your credit file.
Yes. Most chattel mortgage agreements allow early payout, though the terms differ between lenders. Some apply an early termination fee or calculate a discount on unearned interest, while others charge a fixed administrative amount. If you expect to sell or upgrade the asset before the term ends, it is worth reviewing payout conditions during the comparison stage rather than after settlement.
Thor Finance ABN 31 629 922 589 is an Authorised Credit Representative #557246 of AFAS Group Pty Ltd, Australian Credit Licence #414426. Information on this page is general in nature and does not take into account your objectives, financial situation, or needs. Tax outcomes depend on individual circumstances. Consider seeking advice from your accountant or a qualified adviser before entering into any credit contract. Approval, rates, and terms are subject to lender assessment.
Email us to let us know how we can help you with your business’ Loan requirements.
Thor Finance
ABN 31 629 922 589
Contact us to see how we can help you with your finance requirements
Thor Finance ABN 31 629 922 589 is an Authorised Credit Representative
#557246 of AFAS Group PTY LTD, Australian Credit Licence #414426.