Whether it's a work vehicle, equipment for a trade, or machinery for a growing business, asset finance is its own category with its own structures — and picking the wrong one can cost you in tax treatment and cash flow, not just interest.
Chattel mortgage
You own the asset from day one, and the lender takes a "chattel mortgage" — a registered security interest — over it as collateral. This is the most common structure for businesses that want to claim GST credits upfront and depreciate the asset. Repayments are typically fixed, often over 2–5 years.
Finance lease
The financier owns the asset and leases it to you for a fixed term, with a residual (balloon) value at the end that you can pay out, refinance, or return the asset against. Lease payments are generally treated as a business expense, which suits some tax positions better than owning the asset outright.
Hire purchase
You hire the asset with an agreement to purchase it by the end of the term. It sits somewhere between a chattel mortgage and a lease in how it's structured and treated — less commonly used than the other two options today, but still available through some lenders.
The right structure depends heavily on your business's tax position, GST reporting method, and how you want the asset to appear on your balance sheet. This is genuinely a conversation to have with your accountant alongside us — the "best" structure for cash flow isn't always the best structure for tax, and vice versa.
How asset finance is assessed
Business asset finance is often assessed more on the strength of your business financials and the asset's resale value than on personal income alone — particularly for established businesses. Newer businesses or sole traders may need to provide more personal financial detail, or consider a low-doc asset finance option.
New vs. used assets
Newer assets typically attract better rates and terms, since they hold value more predictably and have longer useful lives as security. Older or specialised equipment can still be financed, but expect a higher rate and potentially a larger deposit requirement.
Timing alongside a property purchase
If you're financing equipment or a vehicle around the same time as a home loan application, the new asset finance repayment will count against your serviceability for the home loan — timing and sequencing these two applications matters, and it's worth discussing both together rather than in isolation.
Next step
We compare asset finance options across our panel the same way we do home loans — matched to your actual situation, not a one-size-fits-all product.
Ask about asset finance