Truck Finance: Chattel Mortgage vs Novated Lease

  1. The business secures a loan from a lender to buy a truck. The loan agreement details the repayment terms, interest rate, and loan term.
  2. The business owns the truck immediately upon purchase, but the lender registers a security interest, usually through a financial agreement like the Personal Property Securities Register (PPSR)
  3. If the borrower fails to make the payments, the lender can seize the truck. If the loan is paid off without default, the lender will no longer have a security interest in the truck.

Benefits of a Chattel Mortgage

Chattel mortgages come with many benefits for businesses hoping to own a truck. Let’s look at some.

  • Can borrow from $10,000 to over $1,000,000, with loan terms anywhere from 1 to 7 years. 
  • Fixed interest rates start at 7.50% per annum for top-tier businesses—much lower than unsecured business loans.
  • Chattel mortgages can finance new or used machinery and business equipment.
  • Instant ownership of the truck, even if the lender has a security interest.

Tax Benefits of a Chattel Mortgage

If your business is registered for GST on a cash basis and you use a chattel mortgage to purchase a truck:

  • The truck will be recorded as an asset on the business’s balance sheet.
  • You can claim the GST from the truck’s purchase price in your next Business Activity Statement (BAS) after setting up the chattel mortgage.
  • You can claim depreciation on the truck through your end-of-year tax return. Since the truck is a business asset, the interest paid on your chattel mortgage is also tax-deductible. 
  • Be an Australian citizen or permanent resident
  • Have an active Australian Business Number (ABN) or Australian Company Number (ACN)
  • Have a trading history of at least six to twelve months
  • Ensure your business is GST-registered
  • Be able to provide bank statements
  • Maintain a good credit score (475+)

What to Know Before Getting a Chattel Mortgage

Tax Benefits of a Novated Lease

Eligibility Criteria of a Novated Lease

To be eligible for a novated lease, you must:

  • Be a full-time or permanent employee
  • Have access to the salary packaging policy from your employer
  • Have a truck that’s less than eight years old at the end of the lease term
  • Have employer approval

A Comprehensive Guide For Startups When Navigating Truck Finance

Truck financing helps businesses access the vehicles they need to operate. This form of asset lending requires minimum upfront cash while offering businesses tax benefits and flexible terms and conditions. For startups with limited resources, truck finance is the best way to acquire costly vehicles with little investment.

However, if you’re just getting started with truck finance, you may face many challenges when assessing your financial position and estimating your budget. The process itself can be overwhelming. You have to find the best lender, gather the necessary documentation, and learn negotiation skills.

Does all this seem too much for you? This guide will answer all your questions related to truck financing to help you navigate this road easily.

Understanding Truck Finance

Truck finance is a type of lending that allows individuals and businesses to acquire trucks and other heavy vehicles without paying too much upfront cost. Instead, the total purchasing cost is divided over time, allowing you to pay it off while using the vehicle over the course. 

The lender secures the loan against the truck as a form of security. With truck financing, you can save your capital and spend it on other operational expenses.

Types of Truck Finance Options

Many truck finance options are available to startups, but the most common ones are:

Lease Financing

It allows you to use a vehicle for a predefined period without actually owning it. Leasing is a cost-effective way of upgrading your trucks without paying the entire purchase cost upfront.

Hire Purchase

This method enables you to have a truck, provided you purchase it when the lease period ends. Hire purchase is a comprehensive approach that combines leasing and ownership—an ideal choice for startups.

Chatell Mortgage

With this financing method, the lender gives money to buy a truck, which serves as the loan security. The borrower becomes the complete owner of the truck once they pay off the full loan.

Commercial Truck Loans

 It is ideal for businesses that need a wide range of trucks. These vehicles come with flexible terms and competitive interest.

Factors Influencing Decisions

As a startup owner, you must consider a few factors to ensure you make the right choice for truck financing. These include:


Budget is the biggest strain for startups. You should compare the overall cost of different financing options, including interest rates, fees, and any hidden or additional charges, and see what fits best to your needs.


Startups need flexibility in repayment and loan terms to adapt easily to various business situations. Prioritise financing options with flexible repayment plans, such as variable interest rates or adjustable payment schedules.

Eligibility Criteria

Always review the eligibility criteria for your chosen financing option to ensure they meet your startup’s requirements. Some lenders have specific regulations related to credit score or business history.

Long Term Financial Implications

Always review the eligibility criteria for your chosen financing option to ensure they meet your startup’s requirements. Some lenders have specific regulations related to credit score or business history.

Assessing Financial Readiness

The first step when considering business vehicle finance is assessing your startup’s financial readiness, including your financial position, budgeting, and business viability.

Evaluating Financial Position

Here are some key factors to help you evaluate your financial position:

Cash Flow Analysis

Start by going through your cash inflows and outflows over a period–monthly or quarterly. It will help you identify cash flow constraints in your business.


List the assets your startup owns, including vehicles, equipment, machines, and all tangible or intangible assets. Now, evaluate their costs to determine your business’s overall net worth.


See if your startup has any outstanding debts, such as loans, leases, or accounts payable. Find out the total cost of these liabilities to understand what needs to be fulfilled first.

Revenue Projections

Make revenue projections based on your startup’s historical data, market trends, and growth forecasts while considering seasonality and market fluctuations.

Budgeting for Expenses

To develop a budget for your truck-related expenses, you must estimate vehicle acquisition, operation, and maintenance costs.

Vehicle Purchase Costs

Research the purchase costs of trucks to find one that meets your startup’s size, capacity, and functionality. Remember to consider different financing options when doing so.


Assess your maintenance costs, such as routine servicing, parts replacement, and repairs. It will ensure the durability and longevity of the vehicles.

Operational Overheads

Consider additional operational expenses, such as driver permits, salaries, tolls, licensing fees, and administrative costs. These expenses significantly increase the overall cost.

Assessing Business Viability

To evaluate business viability, you should consider the following factors:

Market Demand

Analyse market demand for trucking services in various geographic areas and industries based on economic activity and the demand for transportation services.


Assess your competitors’ actions to evaluate the level of competition and identify potential opportunities and threats.

Growth Potential

Identify growth opportunities like expanding into new markets or diversifying the clientele.

Operational Efficiency

Evaluate operational efficiency to identify areas for improvement and save costs. This includes streamlining operations, optimising routes, and adopting cutting-edge technology.

Long Term Sustainability

Consider the long-term sustainability of the business by evaluating regulatory changes, environmental impact, and industry trends. It will help you maintain a balance between profitability and social responsibility.

Building a Strong Financial Profile

Your startup must have a solid financial profile to qualify for truck finance. Here are some ways to build your creditworthiness in the financial community.

Strengthening Credit

The first is strengthening your credit.

Pay Your Bills On-time

Your startup must pay its bills on time, including invoices, rent, utilities, and credit card balances, to build a positive credit history.

Reducing Debt

A debt repayment strategy helps you reduce existing debt. Prioritise high-interest debts the most and keep paying off the minimum amount on all the other accounts.

Checking Credit Reports

While you may not have time for it, regularly reviewing your credit reports from major credit bureaus can help you identify any potential errors or inaccuracies. These reports can be from Equifax, Experian, or TransUnion.

Establishing Relationships

The next step is to establish relationships with other lenders.

Networking with Lenders

To build a strong profile, you should be known in the lender community. So, actively interact with lenders from banks and other sources at seminars and conferences. This will help you connect and understand their lending requirements.

Building Trust with Financial Advisors

You should also work with reputable financial advisors designated for startups. Try establishing solid relationships with advisors, providing valuable insights into financial management and capital assessment.

Engaging with Industry Stakeholders

Next come industry stakeholders, such as suppliers, business partners, and customers. You can establish credibility with these experts by providing exceptional service and meeting your commitments.

Contact Us

When choosing truck finance, you must strategically decide and proactively manage the entire process until the contract is finalised. However, this could be an additional burden on your startup’s limited resources. 

The best way to deal with truck financing is to consult a qualified financial advisor, accountant, or legal expert, such as those available at Asset Finance Shop. These professionals know how to tackle complex financial issues, make informed decisions, and help you achieve your business goals effectively. 

Connect with us now on the phone at 1300 558 758 or email us at

Unlock the Secrets: Which Truck Financing Options Right for You

Unlock the Secrets: Which Truck Financing Options Right for You

If you have been exploring truck financing options, you’re doing the right thing for your startup. This type of asset financing is ideal for businesses that are just getting started and have a limited budget to purchase heavy vehicles. It allows you to acquire your required vehicles at minimum upfront cash.

However, it’s important to make the right choice for your startup’s financial health and long-term success in the trucking industry. For that, you must consider the pros and cons of different truck finance options and a few factors to make an informed decision.

Keep reading until the end to evaluate different financing options and choose one that best suits your startup’s needs and preferences.

Understanding Truck Financing Options

Truck financing can be performed in various ways, depending on the nature of the business loan and the vehicle ownership. Here are some common truck finance options you should know about:

Lease Financing

With lease financing, you can acquire your required trucks for a predetermined period without the ownership. This offers flexibility to startups, providing them with an affordable way to upgrade their vehicles or add new ones without paying too much cash upfront.

Hire Purchase

The hire purchase method allows you to own the truck by paying instalment amounts. However, you must purchase the truck when the lease period ends to benefit from this financing option. Hire purchase balances leasing and ownership for startups.

Commercial Loans

This method is ideal for startups that need trucks in bulk. It supports truck ownership by providing upfront financing for the purchase at fixed or variable interest rates.

Chattel Morrtgage

With this financing method, the lender provides a loan for the truck purchase, which is the loan security. Once the loan is completely paid off, the borrower takes full ownership of the truck.

Assessing Your Financial Needs and Goals

Now that you know different truck finance options, it’s time to assess your financial needs and goals. Here are some crucial factors to consider:

Financial Goals Assessment

Start with determining why you’re actually opting for truck financing. Do you want to buy new trucks, update your existing ones, or expand your fleet? Make sure to consider both your long-term and short-term goals and how financing can help you achieve them.

Long-term vs. Short-term Goals

Always choose the financing option that goes with your goal’s duration. For short-term goals like expanding your fleet immediately, leasing may be ideal. Similarly, if you want to achieve long-term ownership of the truck, you can get a loan.

Budget and Cash Flow Projections

Your startup’s financial condition significantly impacts your truck financing decision. It includes assessing your cash flow and budget projections by calculating your revenues and expenses and identifying potential fluctuations. Doing so will tell you if you can easily meet the financing requirements.

Business Growth Potential and Industry Trends

Assess your business’s growth potential by identifying potential expansion opportunities in specific markets. You should also analyse relevant industry trends and choose a financing option that offers flexibility to adapt to them.

Risk Management

Evaluating the risks associated with each financing option is also crucial. You should consider interest rates, collateral requirements, repayment terms, and any potential penalties for early repayment. It will allow you to balance your financial goals and risk tolerance.

Comparative Analysis

Last but not least, always compare financing options available, including traditional bank loans, equipment financing, or leasing, based on their terms, rates, and flexibility.

Key Factors to Consider

Some factors to consider when selecting the right business vehicle financing option for your startup include:

Interest Rates

Start by comparing interest rates that different lenders offer. Opting for lower interest rates can reduce your truck financing’s overall cost, allowing you to benefit from your required vehicles at an affordable price.

Repayment Terms

Flexible repayment terms allow you to schedule payments according to your cash flow projections and financial situation. So, when comparing different financing options, consider the duration of the repayment period and the frequency of payments.

Down Payment Requirements

Down payment requirements vary from lender to lender. Some have flexible terms, while others ask for a considerable down payment upfront. Choose the one whose requirements align with your financial capabilities to keep your business operating smoothly.


Financing options that support scalability with changing business needs and market conditions are ideal. Evaluate if it allows you to upgrade, add more vehicles to your fleet, make early repayments without paying penalties, etc.

Total Cost

Calculate and compare the total cost for different financing options to find the most affordable one. Ensure to consider the interest rates, charges, fees, or additional associated costs.

Ownership vs. Leasing Considerations

Study the ownership and leasing concepts to understand the technicalities and complexities involved in both. Doing so will help you understand the differences and make the best choice.

Tax Implications

Truck financing comes with tax benefits that vary from lender to lender. So, always consider the tax implications to plan your tax optimisation strategy better.

Tailoring Financing Solutions to Your Needs

One good thing about truck financing is that you can tailor your chosen option based on your business model and financing needs. Here’s how to do it:

Understand Your Business Model

Review your business model, including cash flow streams, infrastructure, and growth strategies, to determine the success factors, challenges, or requirements.

Assess Financing Needs

Now, see how your business model stands against your financing needs. This will help you find out the actual purpose behind your truck financing. Make sure to take into account your fleet’s size, the types of trucks your operations need, and growth projections.

Customise Financing Options

Whether you have financial knowledge or not, it’s best to work with professional lenders or financing institutions to customise your financing solution. Depending on your business needs, the expert will adjust repayment terms, down payment requirements, or interest rates so they align with your financial capabilities.

Consider Industry Trends

Don’t exclude industry trends and market conditions when tailoring your financing option. For instance, if your industry works according to seasons, opt for a method that offers repayment flexibility to cater to the fluctuations.

Get In Touch

Truck financing is the best way to acquire trucks without paying heavy cash upfront. The decision is quite important, so make sure you’re consulting the best financial advisors. They should have deep knowledge about your business niche to tailor the best financing solution for you.

Asset Finance Shop is one such financial service. Our team of truck finance professionals will sit with you, understand your financial situation, and suggest a financing option accordingly. Contact us via phone at 1300 558 758 or email us at

Why Use A Truck Finance Broker?

Why Use A Truck Finance Broker?

There is a range of options when looking at truck and heavy vehicle finance, and navigating the different loan terms and conditions can be challenging for even the most financially-savvy individuals. That’s why it’s advisable to use a truck finance broker when making such a large purchase.

Want to know more about why you should use a truck finance broker? Here are three reasons why.  

What does a truck finance broker do?

First off, you should understand what a finance broker does. A broker searches for finance and applies for it on your behalf. They take into account your financial situation, including your cash flow, to find the best finance option for your business. A good broker will guide you through the whole process, including after the finance has been approved. 

They deal with the complicated side of financing

It’s not as simple as finding a loan, applying for it, and being approved. A finance broker understands how to navigate and negotiate with different financial institutions and lenders, which most people haven’t done before. They know what information lenders want to see in finance applications, and how to negotiate better loan conditions that are more suitable for you. You could apply for a loan yourself and be denied, but engaging a broker significantly improves your chances of being approved for that same loan.

They specialise in truck finance

Like you have mortgage (or home loan) brokers, there are brokers that specifically deal in financing for trucks and other heavy vehicles. Part of their job is to stay up-to-date on changes in the truck finance area so that they can always offer the best deal and negotiate certain terms and conditions. They’ve often got industry contacts as well, which opens up more financing options for you. They know all the specific industry tips and information, which you wouldn’t otherwise have access to.

They’re often available after hours

Unlike with a bank manager, you’re likely to have a lot more access to your finance broker. They’ll often give you both their office and mobile number, and answer your calls outside of normal business hours. This means you don’t have to wait until Monday morning if you want financing advice, which is useful when you’re looking at trucks on a Saturday. 

Finding the right truck finance broker will make things simpler

When you build a long term relationship with a broker, they’ll get to know and understand your business in a much more comprehensive way. The more they know, the better they can customise finance to suit your needs at any given time. 
If you’re looking for advice on truck and heavy vehicle finance, get in touch with our team today. One of our expert brokers will help you and your business with any of your truck finance requirements, providing personalised advice and giving you the best chance of approval. We work with a large network of lenders, allowing us to get special deals and interest rates you won’t get elsewhere.