Chattel mortgage · Construction
Chattel mortgage for construction
Construction finance is business lending structured around progress claims, retentions and plant purchases, covering equipment loans for machinery and working capital for the gap between paying subbies and being paid.
How a chattel mortgage works for construction
Most construction plant and site vehicles are financed as a chattel mortgage: your company owns the asset from day one, and if you are registered for GST you can generally claim the GST on the purchase price in the next BAS rather than spreading it across payments. Interest and depreciation are deductible where the asset is used in the business. For builders this matters most on a large single purchase — a tipper, a telehandler — where the upfront GST claim can fund the next month of materials. Your accountant should confirm the treatment.
The cash-flow pattern we plan around
Milestone claims certified and paid 30–60 days in arrears, with 5% retention held until practical completion and the end of defects liability.
What construction typically fund
- Excavators, telehandlers and site plant
- Utes and site vehicles
- Wages and materials between progress claims
- Retentions tied up until practical completion
- Bonding and insurance premiums
Chattel mortgage for construction: the numbers
| Typical amounts | $10,000 – $2,000,000 |
|---|---|
| Term | 12–84 months |
| Indicative rates | 6.9% – 14.5% p.a. |
| Repayments | Monthly (weekly or fortnightly available) |
| Speed | 24–48 hours for low-doc up to $150k; longer for full-doc |
| Documents construction usually need | ABN, GST registration and builder licence · 6–12 months of business bank statements · Contract or supplier quote for the plant being financed |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
Key terms
Construction equipment finance
Construction equipment finance is secured lending used to buy excavators, loaders, telehandlers and other plant, where the machine itself is the security and the term is typically 3–7 years with an optional balloon.
Progress-claim cash flow
Progress-claim cash flow is the gap between paying wages, subcontractors and suppliers on a construction job and receiving certified payment for that stage of work, commonly 30–60 days plus retention.
What is a chattel mortgage?
A chattel mortgage is a business loan used to buy a movable asset (a chattel) such as a ute, truck, excavator or equipment. The business takes ownership immediately and the lender registers a security interest over the asset until it is paid off.
Chattel mortgage balloon payment
A balloon is a lump sum, typically 0–40% of the purchase price, paid at the end of the term. It lowers regular repayments but must be paid, refinanced or covered by selling the asset when the term ends.