Chattel Mortgage Finance for Business Vehicles
A chattel mortgage is one of the most popular and tax-effective ways for Australian businesses to finance a vehicle or equipment purchase. Frontline Car Loans arranges chattel mortgage finance for Perth businesses of all sizes — from sole traders and ABN holders to established companies with large fleets. We compare offers from over 30 lenders to find the most competitive rate for your situation.
What Is a Chattel Mortgage?
A chattel mortgage is a type of secured business loan where the lender provides funds to purchase an asset (such as a car, truck, or piece of equipment), and the asset itself serves as security for the loan. Unlike a lease, you own the vehicle from day one. The lender holds a mortgage over the chattel (movable property) until the loan is fully repaid.
Chattel mortgages are exclusively available to businesses — you need an ABN to apply. They are commonly used by sole traders, partnerships, companies, and trusts to acquire vehicles and equipment for business use.
Tax Benefits of a Chattel Mortgage
One of the biggest advantages of a chattel mortgage is the tax benefits available to businesses registered for GST:
Claim the GST upfront: If your business is GST-registered, you can claim the GST component of the vehicle purchase price on your next Business Activity Statement. On a $50,000 vehicle, that is approximately $4,545 back in your pocket straight away.
Claim interest as a tax deduction: The interest charged on your chattel mortgage repayments is tax-deductible as a business expense.
Depreciation deductions: Because you own the asset from day one, you can claim depreciation on the vehicle over its effective life. Under the instant asset write-off provisions, eligible businesses may be able to deduct the full cost of the vehicle in the year of purchase.
Flexible balloon payments: You can structure your chattel mortgage with a balloon or residual payment at the end of the term. This lowers your regular repayments and improves your business cash flow throughout the loan term.
How a Chattel Mortgage Works
Step 1: Choose the vehicle or equipment you want to purchase for your business.
Step 2: Apply through Frontline Car Loans — we will compare chattel mortgage rates across our lender panel to find the best deal.
Step 3: Once approved, the lender funds the purchase. You take ownership of the vehicle immediately.
Step 4: You make regular repayments (weekly, fortnightly, or monthly) over the agreed term, typically 1 to 7 years.
Step 5: If you included a balloon payment, you pay the remaining balance at the end of the term or refinance it.
Chattel Mortgage vs Lease — What Is the Difference?
With a chattel mortgage, you own the vehicle from day one and it appears as an asset on your balance sheet. With a lease (operating or finance lease), the lender owns the vehicle and you make rental payments. Both have tax advantages, but a chattel mortgage is generally preferred by businesses that want to build equity in their assets and claim depreciation and GST credits upfront.
Apply for a Chattel Mortgage Today
Frontline Car Loans makes chattel mortgage finance simple. Call us on 1300 857 130 or submit a free quick quote to get started. Our Perth-based brokers will walk you through the process and find the most competitive rate from our panel of 30+ lenders.