How Chattel Mortgages Can Boost Your Business Cash Flow

For many small businesses, the need for reliable vehicles or equipment is essential – but paying for them outright can put serious pressure on cash flow. A chattel mortgage could help you secure the asset you need now, while keeping your working capital free for other priorities. At AFS, we offer flexible chattel mortgage solutions¹ as part of our commercial loans range, tailored to suit your business goals.

What is a Chattel Mortgage?

A chattel mortgage is a type of business loan where the asset you’re purchasing – such as a work vehicle – is used as security for the finance. You take ownership of the asset from day one, while making fixed repayments over the agreed term.

This differs from options like leases or hire purchase agreements, where ownership may only transfer at the end of the contract. Chattel mortgages are available to ABN holders including sole traders, partnerships, companies, and trusts.

How a Chattel Mortgage Works

1. Select your vehicle or equipment – whether it’s from a dealer, auction, or private sale.
2. AFS provides the finance – you own the asset immediately.
3. Make fixed repayments – over a term that suits your budget (12–84 months).
4. Ownership is clear – once the loan is repaid, the asset is fully yours, without any residual obligations.

At AFS, we finance a wide range of vehicle types (cars, vans, caravans, trucks, motorbikes, boats and more), including new, used, imported, or vintage models, with no age restrictions.

The Cash Flow Advantage

• No large upfront payment – With 100% finance available for approved applicants, you could avoid tying up large amounts of cash in a single purchase.
• Predictable budgeting – Fixed repayments make it easier to plan ahead and forecast expenses, helping you manage seasonal fluctuations in income.
• Potential tax benefits – Depending on your circumstances, you may be able to claim deductions on the interest portion of repayments and the depreciation of the asset. Always seek professional tax advice to confirm your eligibility.
• Preserve other funding options – By using a chattel mortgage for your vehicle or equipment, you could keep overdrafts and other credit lines free for operational expenses.

Business Financing in Action

• Construction business – A mid-sized construction company needed to replace two ageing utes to keep projects on schedule. The business was able to purchase both vehicles at once without draining its emergency cash reserves. Fixed monthly repayments allowed the owners to budget confidently while still having funds available for unexpected expenses like equipment repairs or short-notice project costs.
• Delivery Service – A local delivery company had experienced steady year-on-year growth, with demand well beyond the peak holiday period. They needed additional vans permanently, not just seasonally. By using a chattel mortgage, they could take ownership of the vehicles from day one, customise them with shelving and branded wraps, and avoid ongoing leasing restrictions or kilometre limits. Fixed repayments gave them predictable budgeting, while 100% finance meant they could keep working capital free for wages, fuel, and marketing.

Other Benefits When Borrowing with AFS

• Loan amounts from $5,000 to $130,000.
• Flexible loan terms from 12 to 84 months.
• 100% finance for approved applicants – no deposit required.
• Fast approvals – often on the same day.
• Australian-based processing with personalised service from our experienced lending team.

Is a Chattel Mortgage Right for Your Business?

It could be ideal if you want to own your asset from day one, prefer fixed repayments for easier budgeting, and have an ABN with the vehicle used primarily for business purposes. If you need flexibility in returning or upgrading vehicles, consider whether leasing might suit you better.

Ready to Get Started:

1. Apply online now.
2. Provide bank statements using our secure illion system.
3. Receive your conditional pre-approval¹ – often within 4 hours.
4. Settle your loan – funds are paid directly to the dealer, auction, or private seller.

A chattel mortgage can be a smart way to secure the vehicles or equipment your business needs while keeping your cash flow strong. With fixed repayments, possible tax benefits, and fast approvals, AFS could help you get moving sooner¹. Learn more about our commercial loan options or apply online today.