● Finance Structure

Chattel Mortgage Explained

Australia's most popular business asset finance structure. You own the asset from day one, claim GST upfront, and typically deduct interest and depreciation at tax time.

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Chattel Mortgage Explained

A chattel mortgage is a secured business loan where the lender takes a mortgage over the asset as security, while you retain ownership from settlement. It's the most widely used structure for Australian businesses financing vehicles and equipment.

Best for:

GST-registered businesses wanting to own their asset from day one and maximise tax deductions.

Advantages

✓Own the asset immediately from day one
✓Claim the full GST component upfront on your next BAS
✓Interest payments typically tax deductible
✓Depreciation on the asset typically claimable
✓Fixed repayments for easy cash flow planning
✓Balloon payment option to reduce monthly repayments

Things to Consider

−Asset appears on your balance sheet
−You bear the risk of asset depreciation
−GST benefit requires GST registration
−Early payout fees may apply

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FAQs

Common Questions

Any business with an ABN can apply — sole traders, partnerships, companies and trusts. Low doc options are available if you don't have full financial statements.

Because you're purchasing the asset, you can claim the GST component on your next BAS. This gives an immediate cash flow benefit compared to lease structures where GST is spread across payments.

Yes. A balloon reduces monthly repayments by deferring a lump sum to the end of the term — typically 10–30% of asset value. At end of term you pay it, refinance, or sell the asset.

Virtually any business asset — cars, utes, trucks, trailers, equipment, machinery and plant used predominantly for business purposes.

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Chattel Mortgage Explained