Business vehicle finance

Why finance a business vehicle?

For many businesses, the vehicle is the business. A plumber’s ute, a florist’s van, a sales rep’s car. Paying cash for a vehicle can take a big bite out of working capital, while financing spreads the cost over the years the vehicle earns its keep.

Chattel mortgage, lease or hire purchase?

	Chattel mortgage	Finance lease	Hire purchase
Ownership	You, from day one	Lender	Lender until final payment
Balance sheet	Asset and liability	Lease commitment	Asset and liability
Balloon / residual	Optional	Residual value	Optional

Most business owners use a chattel mortgage. Your accountant can advise which structure works best for your GST and tax position.

What lenders look at

Vehicle lenders are practical. They want to know the vehicle exists, that it’s worth roughly what you’re paying, that nobody else has a claim over it and that the business can comfortably afford the repayments alongside fuel, tyres, insurance and registration. Get those four things lined up and approval is usually straightforward.

• The vehicle: make, model, age, price and seller.
• Your business: ABN, trading history, turnover.
• Your credit history, considered case by case.
• Whether the vehicle is genuinely for business use.

Heavier vehicles have their own entry: truck finance. Electric vehicles and hybrids are covered on green business loans.

Found the vehicle? Send us the details.

An illustrative example

An electrician needs a second fitted-out van for a new apprentice. A chattel mortgage over the van, with repayments matched to the extra jobs the apprentice can take on, funds it without touching the business’s cash reserve. (Illustrative only.)

What else is business vehicle finance called?

Lenders, accountants and search engines don’t all use the same words. You’ll also see this entry described as Business car loan, Ute finance and Van finance. In our A–Z index every one of those names points back to this page, so whichever term you searched, you’ve landed on the same thing. If a lender uses a name you don’t recognise, ask them to describe how the security, the term and the repayments work; that tells you far more than the label.

Where does it sit in the directory?

This entry lives on the trade, stock and asset shelf. It’s most often used for equipment and vehicles, and the security usually involved is the asset being bought. It is one of the quicker entries to put in place when the paperwork is ready. Its closest neighbours are:

• Equipment finance — Spread the cost of machines, tools and tech over their working life.
• Truck finance — Rigid trucks, prime movers, tippers and trailers — new or used.
• Chattel mortgage — You own the asset from day one; the lender holds a security interest over it.
• Machinery finance — Excavators, loaders, tractors and production lines.

To compare all of them at once, filter the Loan Finder by purpose and security.

Common mistakes to avoid

• Choosing the structure before talking to your accountant. Chattel mortgage, hire purchase and leases are treated differently for GST and tax.
• Stretching the term past the asset’s useful life. Paying for something you’ve already replaced is the most common equipment finance regret.
• Skipping the PPSR search on used gear. A quick search confirms nobody else has a security interest over the asset you’re buying.
• Setting a balloon you can’t meet. A big final payment lowers repayments now but needs a real plan for later.
• Forgetting running costs. Insurance, servicing, registration and fuel all sit on top of the repayment.

What should I ask before signing up for business vehicle finance?

A short list of questions saves a lot of regret. Put these to any lender or specialist before you commit:

1. Is the price including or excluding GST? It changes the amount financed and the GST credit you might claim.
2. What age limit applies at the end of the term? Older assets may need shorter terms or a deposit.
3. Is there a balloon, and can I change it? Set it to suit how long you’ll keep the asset.
4. What insurance is required? Lenders usually require comprehensive cover with their interest noted.
5. Can I pay out early? Ask how payout figures are calculated before you commit.

If an answer is vague, ask again or ask for it in writing. Good lenders are happy to explain their terms clearly.

Get on the road

If your business needs a car, ute or van, vehicle finance keeps cash in the business where it’s needed. There’s no credit check to enquire, and one specialist handles your enquiry rather than a queue of lenders.

Please tell us the vehicle, the price, whether it’s new or used and how long you’ve traded. Accurate details mean a smooth approval. Start your enquiry.