Business finance

Chattel Mortgage

A chattel mortgage is a form of equipment loan where the bank or lender provide the funds to purchase a vehicle, asset or piece of equipment and then accept that item as collateral for the loan.

Loan size

$5K To $2M+

loan term

1 to 7 years

Interest rate

5% to 15%

Approval speed


Chattel Mortgage

Key features of a chattel mortgage

The hirer takes immediate ownership of the asset and retains ownership after the end of the payment period. Payment instalments are a combined interest and principal.

Compare a chattel mortgage

Advantages and disadvantages


What are the advantages of a chattel mortgage


What are the disadvantages a chattel mortgage

Common uses & good to know

Everything else about a chattel mortgage

Common uses

This form of finance allows you immediate ownership of the item without the corresponding upfront cash outlay.

This form of loan can often be executed quickly and with minimal paperwork.

As you, the hirer, takes ownership immediately, you are able to claim the depreciation of the asset.

Good to know

Should you default on your debt, the bank may repossess your asset or piece of equipment.

While lower cost than unsecured loans, chattel mortgages are more expensive than business loans secured by for instance property.

There may also be fees involved from setting up the mortgage to early termination fees that add to the cost of the loan.

Alternative Commercial Lending options

Other Business Finance Products​

Secured Business Loan

A secured business loan is a loan made by a bank or finance company where the lender requires the borrower to pledge assets as collateral against the loan.

Unsecured business loan

Unsecured business loans are loans made without requiring business collateral such as property or inventory.

Trade finance

Trade finance is any form of finance that is issued to support international trade, including letters of credit, debtor finance, & export credit.

Commercial Lending

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Chattel mortgage FAQ

Frequently asked questions

As is the case for all equipment loans and leases, the fact that a chattel mortgage gives the lender collateral in terms of the asset leased means that the lenders may take a slightly more flexible approach to your credit score and operating history.

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