Chattel Mortgage vs Finance Lease

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Annual interest rate 8.00% p.a.

3% 18%

Term 60 months

12 months 84 months

Balloon / residual 0% of loan

0% 60%

Percentage of the loan left owing as a final lump-sum (balloon / residual).

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This calculator provides an estimate only and does not constitute an offer of finance. Actual repayments will depend on your profile, lender and product.

Understand the key differences between a chattel mortgage and a finance lease for equipment purchases. Learn which structure saves you more on tax, suits your cash flow, and works best for your business type.

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FINANCE COMPARISON

Chattel Mortgage vs Finance Lease: Which Is Right for Your Business?

A chattel mortgage means you own the equipment from day one and can claim GST upfront. A finance lease means the lender owns the asset and you make lease payments that are typically tax deductible as an operating expense. Each has clear advantages depending on your situation, and our brokers can model both scenarios for your specific purchase.

Choosing between a chattel mortgage and a finance lease is one of the most important decisions when financing equipment. Both let you acquire equipment without paying the full price upfront, but they differ significantly in ownership, tax treatment, GST claims, and end of term options. The right choice depends on your business structure, tax position, and how you plan to use the asset.

Trucks

Semi-Trailers & Trailers

Refrigerated trucks

Excavators & Loaders

Cranes & Site Machinery

Trailer Trucks

Tractors & Harvesters

Yellow Goods

Skid Steers & Access Equipment

Ownership and asset control

With a chattel mortgage, you own the equipment from settlement. With a finance lease, the lender retains ownership until the lease ends. This affects your balance sheet, insurance responsibilities, and disposal rights.

GST treatment

A chattel mortgage lets you claim the full GST credit upfront on your next BAS return. With a finance lease, GST is included in each lease payment and claimed progressively. For cash flow conscious businesses, the upfront GST claim can be significant.

Tax deductions

Chattel mortgage interest and depreciation are tax deductible. Finance lease payments are deductible as an operating expense. Your accountant can advise which produces the better outcome based on your taxable income and business structure.

End of term options

A chattel mortgage ends when the loan is paid off and you own the asset outright. A finance lease typically offers options to purchase the equipment at residual value, extend the lease, or return the asset. Each has different financial implications.

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You want to own the equipment outright
You are registered for GST and want to claim it upfront
You want to claim depreciation on the asset
You prefer a fixed term with full ownership at the end
You are a sole trader, partnership, or company
You want the asset on your balance sheet

You prefer lower regular payments
You want payments treated as an operating expense
You do not want the asset on your balance sheet
You want flexibility to upgrade at end of term
You prefer the lender to handle residual risk
You are unsure if you will keep the asset long term

Commercial Hire Purchase for hire businesses
Operating Lease for short term needs
Rent to Own for eventual ownership
Novated Lease for employee vehicles
Chattel Mortgage with balloon for lower payments
Lines of credit for ongoing equipment needs

We model both structures with your actual numbers
We calculate the total cost of ownership for each
We consider your tax bracket and BAS position
We factor in your cash flow requirements
We consult with your accountant if needed
We present the best option from 80+ lenders

HOW THE PROCESS WORKS

How to Choose the Right Finance Structure

Our brokers walk you through a simple comparison process to find the structure that saves you the most.

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Barinder Singh

Transport Operator

Non-property owner

No deposit

24hr turnaround

2025 Tipper Trailer

Transport

$150,000

Barinder needed a new tipper trailer to keep up with growing contract work but didn’t own property and didn’t have a deposit available. Traditional lenders declined the deal based on security requirements.
We structured the finance around the strength of the business income and the asset itself, delivering approval and settlement within 24 hours so the trailer could be put straight to work.

Get a Quote Like This

2005 CAT Excavator

Contractor

$60,000

Neil was purchasing a used excavator to support ongoing civil jobs but needed a simple low-doc solution without extensive financials slowing the process down.
We secured approval within 24 hours using a streamlined low-doc structure , allowing him to secure the machine before another buyer stepped in

Get a Quote Like This

Bradley Moore

Owner-Driver

Private sale

Low Doc

24hr approval

2019 Scania Truck

Contractor

$100,000

Bradley found the right truck through a private seller and needed fast finance to avoid losing the deal. The transaction structure made traditional lenders hesitant.
We arranged a low-doc facility tailored to a private sale purchase and delivered approval inside 24 hours, enabling Bradley to secure the vehicle and get back on the road generating income.

Get a Quote Like This