Chattel mortgage, lease or loan: which structure suits how your business uses the asset.
Anthony Nocon
Founder and Mortgage Broker, Financeo
Published
9 September 2026
Last revised
11 November 2026
Reading time
5 min read
TL;DRIn a nutshell
✓Chattel mortgage: you own the asset from day one and the loan is secured against it.
✓Lease: the financier owns it and you pay to use it.
✓Balloon: a final lump sum lowers regular repayments.
✓Tax: GST, depreciation and deductions differ by structure, so check with your accountant.
The main options compared
The best structure depends on whether you want to own the asset, how you account for GST, and how long you'll keep it.
Finance structures (general)
Chattel mortgage
Finance lease
Novated lease
Who owns it
You
Financier
Financier
Best for
Most businesses
Off-balance-sheet use
Employees
GST
Claim upfront (if registered)
On each payment
Via salary packaging
How a balloon payment works
A balloon is a lump sum due at the end of the term. It lowers your regular repayments, but you pay more interest overall and need a plan to pay it.
Monthly repayment on $80,000 over 5 years (example)
No balloon$1,622
30% balloon$1,295
Illustrative only, at 8% p.a. The 30% balloon ($24,000) is due at the end.
Getting approved quickly
Have your ABN, recent financials or BAS, and the supplier invoice ready. Many approvals for established businesses come through within a day or two.
01
Setting a balloon you can't pay
Plan how you'll refinance or sell at the end.
02
Ignoring the term
Match the term to the asset's working life.
03
Skipping tax advice
Structure affects GST and deductions.
Quick self-check
Tick what applies to you. It's a rough guide, not an assessment.
Tick the boxes above to see where you stand.
Frequently asked questions
Yes. Many lenders finance used vehicles and equipment, usually with age limits.
This article is general information only and doesn't take your circumstances into account. Lending rules, rates and thresholds change, so check current details or speak with us before acting.
About the author
Anthony Nocon
Founder and Director of Financeo. More than a decade in lending, including commercial, business, property and private banking roles at Commonwealth Bank.
Chattel mortgage, lease or loan: which structure suits how your business uses the asset.
Anthony Nocon
Founder and Mortgage Broker, Financeo
Published
9 September 2026
Last revised
11 November 2026
Reading time
5 min read
TL;DRIn a nutshell
✓Chattel mortgage: you own the asset from day one and the loan is secured against it.
✓Lease: the financier owns it and you pay to use it.
✓Balloon: a final lump sum lowers regular repayments.
✓Tax: GST, depreciation and deductions differ by structure, so check with your accountant.
The main options compared
The best structure depends on whether you want to own the asset, how you account for GST, and how long you'll keep it.
Finance structures (general)
Chattel mortgage
Finance lease
Novated lease
Who owns it
You
Financier
Financier
Best for
Most businesses
Off-balance-sheet use
Employees
GST
Claim upfront (if registered)
On each payment
Via salary packaging
How a balloon payment works
A balloon is a lump sum due at the end of the term. It lowers your regular repayments, but you pay more interest overall and need a plan to pay it.
Monthly repayment on $80,000 over 5 years (example)
No balloon$1,622
30% balloon$1,295
Illustrative only, at 8% p.a. The 30% balloon ($24,000) is due at the end.
Getting approved quickly
Have your ABN, recent financials or BAS, and the supplier invoice ready. Many approvals for established businesses come through within a day or two.
01
Setting a balloon you can't pay
Plan how you'll refinance or sell at the end.
02
Ignoring the term
Match the term to the asset's working life.
03
Skipping tax advice
Structure affects GST and deductions.
Quick self-check
Tick what applies to you. It's a rough guide, not an assessment.
{{ checkMsg }}
Frequently asked questions
{{ f.a }}
This article is general information only and doesn't take your circumstances into account. {{ discText }}
About the author
Anthony Nocon
Founder and Director of Financeo. More than a decade in lending, including commercial, business, property and private banking roles at Commonwealth Bank.
