Also called: Equipment loan, Goods loan
Chattel mortgage
A chattel mortgage is a commercial finance contract where your business owns the asset from the date of purchase and the lender takes a registered security interest over it until the loan is repaid. It is the most common structure for business equipment and vehicles in Australia.
What is a chattel mortgage?
A chattel mortgage is a commercial finance contract where your business owns the asset from the date of purchase and the lender takes a registered security interest over it until the loan is repaid. It is the most common structure for business equipment and vehicles in Australia.
Example
A landscaper buys a $60,000 tipper under a chattel mortgage over 60 months with a $12,000 balloon. The business owns the truck from day one; the lender registers its interest on the PPSR.
Why it matters
Ownership from the start affects how GST and depreciation are treated, which is why most accountants favour it for businesses buying plant outright.