A Chattel Mortgage is a type of finance typically used for the purpose of purchasing motor vehicles, trucks, industrial or other business plant equipment.
You own the equipment or vehicle, however the financier retains a charge over the asset until final payment. A Residual (balloon) is not typical and deposits are not essential, though a cash deposit or trade-in can be used to reduce the amount financed and the consequent monthly repayment.

Clients (the owner) can claim the allowable depreciation and interest as a tax deduction. This form of financing is considered suitable for clients using the ‘Cash’ method accounting for GST as it allows the client to claim a full input tax credit for any GST paid relating to the purchase.  ABN holders can claim the full GST upfront.

The loan term is typically 1 to 5 years.  Interest rates remain fixed over this term, as do the associated repayments which can be in-advance or in-arrears.