By the Loan Phone team Reviewed by Anthony Moncada, M.App.Fin, Cert IV Finance & Mortgage Broking
Quick Answer
Australian chattel mortgage lenders include major banks, specialist equipment finance providers, and non-bank lenders, each offering different rates, terms, and approval criteria. In 2025, rates typically range from 6% p.a. for prime business borrowers with strong trading history to 12%+ p.a. for higher-risk profiles or specialist equipment (indicative only). Comparison rate (including all fees) often varies significantly from advertised rates—a 7% rate with high fees may cost more than an 8% rate with minimal fees. Modern comparison platforms provide access to 100+ lenders simultaneously, helping businesses identify optimal chattel mortgage options efficiently. Settlement timeframes vary from 24-48 hours for straightforward applications to several days for complex assessments (subject to lender and circumstances).
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Lender Categories in Australia
The Australian chattel mortgage market comprises distinct lender types, each serving different business segments and risk profiles.
Major Banks
The Big Four banks (CBA, Westpac, ANZ, NAB) plus regional banks like Bankwest, Bank of Queensland, and Bendigo Bank offer chattel mortgages as part of broader business banking relationships. Major banks typically provide competitive rates for established businesses with strong financial positions but may have stricter lending criteria and longer approval processes.
Strengths: Competitive rates for prime borrowers (typically 6-8.5% p.a. for new vehicles), established reputation, comprehensive business banking services, relationship banking benefits.
Limitations: More rigid lending criteria, may require minimum trading history (2+ years), slower approval processes, higher documentation requirements.
See our Commonwealth Bank Asset Finance review and ANZ Asset Finance guides for major bank specifics.
Specialist Equipment Finance Providers
Non-bank lenders focusing exclusively on equipment and vehicle finance, including Resimac, Pepper Money, Metro Finance, and numerous specialist providers. These lenders understand equipment values, resale markets, and industry-specific requirements better than mainstream banks.
Strengths: Flexible lending criteria, faster approval processes (often 24-48 hours), industry expertise, willingness to finance older equipment or non-standard assets, competitive rates for specialist circumstances.
Limitations: Rates may be slightly higher than major banks for prime borrowers (typically 7-11% p.a.), potentially higher fees, smaller organisations may have less brand recognition.
Review our Resimac Asset Finance and Pepper Asset Finance guides for specialist lender details.
Alternative Lenders
Fintech lenders and online-first providers offering streamlined digital application processes. These newer entrants leverage technology for faster assessment and approval, often with simplified documentation requirements.
Strengths: Fast approvals (sometimes same-day), simplified application processes, lower documentation requirements, may consider newer businesses.
Limitations: Potentially higher rates (8-12%+ p.a.), smaller loan amounts available, less established track records, may charge higher fees.
Key Comparison Factors
Comparing chattel mortgage lenders effectively requires evaluating multiple factors beyond advertised interest rates.
Interest Rates and Comparison Rates
Advertised rates vary based on equipment type, age, loan amount, and business risk profile. However, the comparison rate (incorporating all fees) provides a more accurate total cost picture.
Example: Comparing Total Cost
| Lender A (7.0% p.a.) | $1200 fee + $20/mth fee |
| Lender B (7.5% p.a.) | $300 fee + $0/mth fee |
| Result | Lender B may be cheaper over 5 years |
Always request comparison rates and total cost projections when evaluating lenders.
Fees and Charges
Common fees include:
- Establishment fees: $300-$1,500+ depending on loan size
- Monthly account keeping: $10-$30 per month
- Early repayment fees: Can be substantial for fixed-rate loans
- PPSR registration: $50-$150 for security interest registration and removal
Loan Terms and Flexibility
- Loan terms: Most lenders offer 1-7 year terms, though specific equipment types may have restrictions. Heavy machinery often qualifies for 5-7 years, while IT equipment may be limited to 2-3 years matching useful life.
- Balloon payments: Flexibility in structuring balloon payments (residual values) varies significantly. Some lenders allow balloons up to 50% of loan amount, others limit to 30-40%.
- Repayment frequency: While monthly repayments are standard, some lenders accommodate quarterly, seasonal, or customised schedules for businesses with variable cash flows.
Approval Criteria and Speed
- Trading history requirements: Major banks typically require 2+ years trading, specialist lenders may accept 12+ months, alternative lenders sometimes consider 6+ months.
- Credit requirements: Most lenders require director credit scores of 500-600+ and company scores of 475-500+. Poor credit doesn’t necessarily preclude approval but typically results in higher rates or specialist lender requirements.
- Approval speed: Digital-first lenders may provide decisions within hours, major banks typically take 2-5 business days, complex applications may require 5-10 days regardless of lender.
Asset and Equipment Policies
- Vehicle and equipment age limits: Most lenders finance assets up to 12-15 years old, with age affecting rates and terms. New vehicles under 4.5 tonnes typically attract the lowest rates.
- Equipment type restrictions: Some lenders specialise in certain equipment categories (vehicles, medical equipment, construction machinery) while others offer broad coverage. Unusual or niche equipment may require specialist lenders.
- Green asset discounts: Some lenders offer rate discounts (0.5-2% p.a.) for environmentally friendly assets like electric vehicles or energy-efficient equipment.
Using Comparison Platforms and Brokers
Rather than approaching lenders individually, modern comparison platforms and specialist brokers provide efficient access to multiple lenders simultaneously.
- Comparison platforms: Digital platforms that assess your requirements and match them against multiple lender products, often providing preliminary rate indications within minutes. These platforms typically don’t charge fees, earning commissions from lenders for successful applications.
- Specialist brokers: Finance professionals with established lender relationships who assess your needs, negotiate on your behalf, and manage the application process. Brokers often access rates and products not available directly to businesses, particularly from specialist lenders.
- Benefits of using aggregators: Single application process, multiple offers to compare, expert guidance on optimal structure, time savings, potential access to better rates through lender relationships, ongoing support throughout application.
Compare the best equipment finance lenders to understand which providers suit your specific needs.
Making the Right Choice
Selecting the optimal chattel mortgage lender requires balancing multiple factors:
- For established businesses with strong financials: Major banks often provide the most competitive rates with comprehensive banking relationships. Worth comparing against specialist lenders to ensure best value.
- For newer businesses (12-24 months trading): Specialist equipment finance providers typically offer more flexible criteria and faster approvals, though potentially at slightly higher rates.
- For unique or specialist equipment: Specialist lenders with industry expertise often prove superior to mainstream banks unfamiliar with specific equipment types or industries.
- For speed-critical situations: Digital lenders and specialist providers typically deliver faster decisions and settlements than traditional banks.
- For complex or challenging circumstances: Brokers with extensive lender panels can identify specialist lenders willing to consider applications major banks might decline.
Always obtain multiple quotes before committing. Rate differences of 1-2% can translate to thousands of dollars over a loan term, making comparison worthwhile.
For detailed information on chattel mortgage structures, see our comprehensive chattel mortgage Australia guide.
Frequently Asked Questions
Do all lenders publish their rates? No, most chattel mortgage lenders don’t publish specific rates publicly as they vary significantly based on equipment type, age, loan amount, business profile, and current market conditions. Rates are typically provided on application after lender assessment.
Can I switch lenders during my loan term? Yes, refinancing to a new lender is possible, though early exit fees from your current lender may apply (particularly for fixed-rate loans). Calculate total costs including exit fees before refinancing to ensure overall savings. See our equipment refinancing guide for more details.
Do brokers charge fees for comparing lenders? Most business finance brokers don’t charge upfront fees to borrowers, instead earning commissions from lenders for successful applications. Always clarify fee structures before engaging a broker. Some brokers may charge fees for complex or specialist applications.
Speak with Specialists
Need expert guidance on your chattel mortgage application? Email: loans@loanphone.com.au Website: www.loanphone.com.au
Related Resources
Explore these related guides for business owners and ABN holders:
Disclaimer: This article provides general information only and should not be relied upon as financial or tax advice. Rates, terms, and eligibility vary by lender and individual circumstances. Tax benefits are subject to your specific business structure and circumstances. Always seek independent professional advice from a qualified accountant and financial adviser before making financing decisions.
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Last updated: 2025-11-09