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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Chattel mortgage

What is a chattel mortgage in Australian business finance?

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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A chattel mortgage, in Australian usage, is a loan to buy a vehicle or equipment in which the business owns the asset from the start and the lender takes security over it, registered on the PPSR, until the loan is repaid. It differs from hire purchase and leasing, where the financier owns the asset during the term, and it is among the most common forms of business vehicle finance in Australia, partly because, unlike a lease, it lets a GST-registered buyer claim the GST credit up front. The term also appears in New Zealand; in the UK the arrangement is usually described as a loan secured over the asset.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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