Chattel mortgage · Sole traders
Chattel mortgage for sole traders
Sole trader finance is business lending to an individual trading under their own ABN, where the applicant and the business are the same legal person, so personal credit and personal income are assessed alongside business banking.
How a chattel mortgage works for sole traders
A chattel mortgage works for a sole trader exactly as it does for a company: you own the vehicle or machine from settlement and, if registered for GST, generally claim the GST on the purchase price in the next BAS. The difference is the assessment — the lender looks at your personal credit file and your ABN together. Where the asset is used partly privately, only the business-use proportion is deductible, so keep a logbook. Your accountant should confirm the apportionment before you claim.
The cash-flow pattern we plan around
Irregular drawings and income concentrated around job completion or invoice payment, frequently with business and personal spending running through the same accounts.
What sole traders typically fund
- A work vehicle or first piece of equipment
- Tools and trade equipment
- Cash flow between invoices
- BAS and income tax liabilities
Chattel mortgage for sole traders: 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 sole traders usually need | ABN and personal identification · 6 months of bank statements covering business income · Most recent individual tax return or notice of assessment |
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
Sole trader business loan
A sole trader business loan is finance provided to an individual trading under their own ABN, assessed on both the business banking and the applicant’s personal credit position because there is no separate legal entity.
Low-doc assessment
Low-doc assessment is a lending approach that uses bank statements or an accountant’s declaration in place of full financial statements, commonly used where a sole trader’s tax returns are not yet lodged.
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.