A business buying a ute, a truck, a machine or a fit-out is making two decisions at once: which asset, and how to pay for it. The second decision is assessed quite differently from a home loan. The lender is forming a view on a trading business and on the asset itself, and both the structure and the price depend on how well those two things are presented.
What we arrange
We do not arrange consumer car loans or personal loans. Where an enquiry is for a private vehicle, we will say so and point the person somewhere sensible.
How a lender reads the application
| What is assessed | What it means in practice |
|---|---|
| The business | Time trading under the current ABN, GST registration, and how the business presents in its financials or, for simpler applications, in its bank statements. Many lenders have a streamlined path for established businesses buying a standard asset, with little or no financials required up to a limit. |
| The asset | Type, age at the end of the term, and how readily it could be resold. A three-year-old prime mover and a specialised piece of medical equipment are priced differently because the lender's security position is different. |
| The structure | Term, deposit and balloon. A balloon lowers the repayment and raises the total interest; a lender will cap it to what the asset is expected to be worth when the balloon falls due. |
| The director | Credit history and, on smaller or newer businesses, a personal guarantee. Property ownership often improves pricing, because it changes the lender's view of the guarantee. |
| Timing | Private sales, auction purchases and end-of-financial-year deadlines each have their own requirements. An application prepared before the asset is chosen is almost always smoother than one prepared after a deposit has been paid. |
The balloon, the GST and the deduction
Three features make a chattel mortgage different from a personal loan, and all three are worth understanding before the quote. The balloon is a lump sum due at the end of the term; it lowers each repayment but the business must pay it, refinance it or sell the asset to meet it. A business registered for GST can generally claim the GST in the purchase price on its next activity statement, because it owns the asset outright, which is a cash-flow point rather than a saving. And the interest and depreciation are generally deductible to the extent of business use. The tax position is your accountant's call; the lending structure is ours, and the two should be set together.
The chattel mortgage calculator shows the repayment, the balloon, the total cost and the GST line for any asset price, term and balloon, with payments in arrears or in advance, and compares balloon levels side by side.
Who this is for
Sole traders, companies and trusts buying assets for the business: trades and construction, transport, agriculture, medical and allied health practices, hospitality fit-outs and professional firms. Self-employed borrowers whose home loan and business lending need to be considered together are a particular focus, because the way business income is read for one affects the other.