Compare finance types
Chattel mortgage vs Sale and leaseback: which is right for your business?
The main difference between a chattel mortgage and a sale and leaseback is how they are secured and repaid: a chattel mortgage suits businesses buying vehicles or equipment they want to own and depreciate, while a sale and leaseback suits asset-rich businesses needing working capital for growth, a contract or a tax liability.
Chattel mortgage vs Sale and leaseback at a glance
| Chattel mortgage | Sale and leaseback | |
|---|---|---|
| What it is | A chattel mortgage is equipment or vehicle finance where your business owns the asset from purchase and the lender holds a mortgage over it as security until the loan is repaid. It is the most common structure for business vehicles, machinery and plant in Australia. | Sale and leaseback is an arrangement where you sell equipment your business already owns to a financier for its market value and immediately lease or finance it back, releasing cash while keeping the asset in daily use. It converts equity locked in plant into working capital. |
| Amount | $10,000 – $2,000,000 | $20,000 – $2,000,000 |
| Term | 12–84 months | 12–60 months |
| Indicative rate | 6.9% – 14.5% p.a. | 8.5% – 18% p.a. |
| Rate type | Fixed | Fixed |
| Security | Secured by the asset | Secured by the asset |
| Repayments | Monthly (weekly or fortnightly available) | Monthly |
| Typical speed | 24–48 hours for low-doc up to $150k; longer for full-doc | 3–10 business days including valuation |
| Best for | Businesses buying vehicles or equipment they want to own and depreciate | Asset-rich businesses needing working capital for growth, a contract or a tax liability |
| Consider the other if | Assets you plan to return or upgrade every couple of years | Older, low-value or specialised equipment with a thin resale market |
| Tax | Interest and depreciation are generally deductible and GST may be claimable upfront. Confirm with your accountant. | A sale may trigger a balancing adjustment against the asset’s written-down value. Get accounting advice before proceeding. |
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.
When to choose a chattel mortgage
A chattel mortgage is usually the better fit for businesses buying vehicles or equipment they want to own and depreciate. Its main advantages are lower rates than unsecured lending, gst on the price usually claimable upfront, balloon option lowers repayments. Consider the alternative if assets you plan to return or upgrade every couple of years.
When to choose a sale and leaseback
A sale and leaseback is usually the better fit for asset-rich businesses needing working capital for growth, a contract or a tax liability. Its main advantages are releases capital without losing the use of the asset, priced as secured finance, not unsecured lending, no property security required. Consider the alternative if older, low-value or specialised equipment with a thin resale market.
Chattel mortgage
A chattel mortgage is equipment or vehicle finance where your business owns the asset from purchase and the lender holds a mortgage over it as security until the loan is repaid. It is the most common structure for business vehicles, machinery and plant in Australia.
Sale and leaseback
Sale and leaseback is an arrangement where you sell equipment your business already owns to a financier for its market value and immediately lease or finance it back, releasing cash while keeping the asset in daily use. It converts equity locked in plant into working capital.