Business vehicle finance
Compare business vehicle finance from our lender panel
Finance for the cars, utes, vans and trucks that work in your business, new or used. Business-use vehicles only: we don't arrange personal car loans.
An enquiry is a conversation, not an application. We won't submit anything to a lender without your say-so.
The basics
What is a chattel mortgage and how does it work for a car?
A chattel mortgage is the standard structure for business vehicle finance in Australia. The "chattel" is the vehicle and the "mortgage" is the security interest the lender registers over it. You own it from the day it is delivered, the lender's interest sits over it until the loan is repaid, and once repaid the interest is released.
Ownership from day one is the point, and it separates this from renting the vehicle over a term: the vehicle is your asset and sits on your balance sheet. It also means the lender is secured by something with a resale value, which is why a vehicle facility is assessed differently from unsecured lending. Ownership is also why this page has a tax section: owning and renting are different positions, and the difference is decided when you sign, not at year end (section 3 covers it). For how a chattel mortgage compares to a finance lease and hire purchase, see chattel mortgage vs finance lease vs hire purchase.
What does a business car finance broker do?
A business car finance broker is a finance broker who compares finance for cars, utes, vans and trucks used in a business. 121 Brokers is one: business-use vehicles only, not personal car loans. We match your vehicle and file to lenders with appetite for both, then compare rate, fees, term available on that vehicle, balloon and early-payout cost. We are a broker, not a lender: the lender assesses, prices and decides. We are typically paid a commission by the lender when your finance settles. Read how business finance broking works.
Is a business car loan tax deductible?
It depends on how much the vehicle is genuinely used in the business, and on your ability to substantiate that with records rather than an estimate. The structure you finance it under matters too, because owning an asset and renting one are different tax positions. What you can claim, and how much, is a question for your accountant against your circumstances.
That is not a dodge, and it is not us being careful for the sake of it. It is the actual answer, and the reason is worth understanding: nobody can tell you what a vehicle is worth to you at tax time without knowing how you use it, what entity holds it, and what you have written down. Anyone who gives you a number off a web page has not asked you a single one of those questions.
What decides the answer. Three things, in this order.
Business use. A vehicle used in the business is treated differently from a vehicle that is mostly yours and occasionally the business's. The proportion is not a matter of opinion, it is a matter of evidence, and it drives everything downstream. This is also the boundary we work to: we arrange business-purpose finance, so if the vehicle is mainly for personal use, business vehicle finance is not the right product and we will say so.
Ownership. Under a chattel mortgage you own the vehicle from day one. Under a rental-style structure you do not. An owner's position and a renter's position are different, which is why the structure is a tax decision as well as a finance decision, and why it is worth having your accountant in the conversation before the contract is signed rather than after.
Substantiation. The ATO publishes the methods available for substantiating business use and the records each method requires. Which method you can use later depends on records you either kept or did not keep, starting the day the vehicle arrives. This is the single most common expensive mistake we see on vehicle deals, and it costs nothing to avoid.
GST. Whether you can claim the GST in the purchase price, and when, turns on your GST registration, how your entity accounts for GST, and the business-use position. The structure affects it as well: buying an asset and renting one are not the same GST event. Take the actual contract to your accountant before you sign it, and check the current position at ato.gov.au.
Where we fit. We are not your accountant and we do not do your tax. What we can do is flag the decision points at the point they are actually made, which is the finance stage, because the structure is set in the contract and it is expensive to change afterwards. That is the whole reason this section exists on a broker's page.
What to ask your accountant before you sign
Take these to your accountant with the actual quote and the actual contract, not a description of them. The answers depend on your circumstances, your entity and the current rules, all of which your accountant has and this page does not.
- Given how this vehicle will actually be used, what proportion is business use, and what records do I need to keep to prove it?
- Which substantiation method suits us, and what does it require me to do, starting from the delivery date?
- Does this structure suit our entity, or is a different one better for our position?
- What is the GST position on this purchase, and when does it apply?
- If the quote includes a balloon, what does that do to our position over the term, and at the end of it?
- Is there anything about the timing of this purchase I should know about before I sign?
And the honest one: if your accountant's answer changes what you should buy, or how, that is a cheaper conversation to have now than in twelve months. We would rather hold a deal for a week than arrange the wrong structure quickly.
How it works with a broker
You do not have to take the dealer's finance because it is on the desk in front of you. You tell us the vehicle and how it will be used, we take it to the lenders on our panel whose appetite fits it, and you decide.
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You tell us once.
The vehicle, new or used, and where it is coming from. How it will actually be used in the business. Whether you want a balloon. Your trading history and how the entity is structured. One conversation and one set of documents.
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We compare the panel.
We match your file and your vehicle to the lenders likely to have appetite for both, then compare what comes back on the things that matter: the rate, the fees, the term available on that vehicle, the balloon, and what it costs to end the contract early.
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You choose, before you sign.
We put the options side by side, flag the structure and tax decision points for your accountant, and explain the trade-offs. If you want to proceed, we handle the paperwork with the lender you picked.
Should you take a balloon payment?
A balloon defers part of the principal to the end of the term. Your regular repayments fall, because you are repaying less of the loan across the term, and a larger single amount is owed at the end. It does not reduce what the vehicle costs. It moves it, and it costs more to move it.
| Feature | With a balloon | Without a balloon |
|---|---|---|
| Regular repayment | Lower | Higher |
| How much principal you repay across the term | Less | All of it |
| Total interest across the term | Higher. More principal is outstanding for longer, and interest accrues on what is outstanding | Lower |
| At the end of the term | The balloon is due. You pay it out, refinance it, or sell or trade the vehicle to clear it | You own it outright. Nothing further is owed |
| If the vehicle is worth less than the balloon at the end | You cover the gap out of your own money | Not applicable |
| What it does for cash flow | Frees up cash across the term, which can be the right call if that cash is earning more elsewhere in the business | Costs more monthly, finishes clean |
| Suits | A vehicle you intend to trade or replace at the end of the term, in a business where monthly cash flow is the binding constraint | A vehicle you intend to keep and run, where the goal is to own it and stop paying |
Balloon availability, size and conditions are set by the lender and vary by lender, by vehicle and by term. The table describes how a balloon generally works, not the terms of any particular offer.
So should I take one?
There is no general answer, and anyone who gives you one without seeing your numbers is guessing. But the mechanics point somewhere useful.
A balloon is not a discount. It is a deferral, and deferral is not free. The lower repayment is not the lender being generous: you are repaying less of the loan each month, so more of it stays outstanding, so more interest accrues on it. You will pay more for the same vehicle. That is the trade, stated plainly, and it can still be the right trade.
It is the right trade when the cash is worth more inside the business than the extra interest costs. If the money the balloon frees up each month is funding stock, staff or a job that earns more than the additional interest, the arithmetic supports it. That is a real calculation with your numbers in it, not a preference.
It is the wrong trade when the balloon is doing the job of a repayment you cannot afford. If the only way the deal works is with a balloon, the honest read is that the vehicle is too expensive for the business right now, and the balloon has moved that problem to a date when a vehicle three or more years old has to cover it.
The question nobody asks at the dealership: what will this vehicle actually be worth at the end of the term? Because that is what the balloon is really betting on. If the vehicle is worth more than the balloon, you have options: sell it, clear the balloon, keep the difference. If it is worth less, you find the gap in cash. High-kilometre vehicles, hard-worked utes and anything in a category that is moving fast are where that bet goes wrong.
Worth doing before you decide: ask us to model it both ways on the actual quotes, so you are choosing on the total, not the monthly.
What you can finance
The ute works for the business. Its finance should too.
Cars, utes, vans, trucks and trailers, new or used, as long as the vehicle works in the business. What a lender will fund depends on the vehicle as much as on you: its type, its age, its condition and where it is coming from all affect who will look at it and on what terms.
Read more
Used vehicles are financeable, and the catch is not where people expect it. Lenders commonly assess a vehicle's age at the end of the term, not the start. That is what catches buyers out: the term you want may not be available on the vehicle you want, so a good buy on an older vehicle can quietly become a shorter term and a higher repayment. Worth knowing before you commit to the vehicle, not after.
Private sales and auctions are usually possible, with more paperwork. A dealer sale comes with the ownership and encumbrance position already sorted. A private sale does not, so expect the lender to verify who actually owns the vehicle and whether anything is owed on it before it releases a cent. That takes longer at our end and it is worth building into your plans with the seller.
Trucks and heavy vehicles are a different appetite from cars, and often a different set of lenders. If your fleet spans both, that is a reason to use a panel rather than a bank.
Where this is the wrong page. If you are financing a vehicle alongside other gear, equipment finance covers the wider asset range and the structure comparison. And if the vehicle is mainly for personal use with some business running around, business vehicle finance is not the right product and we will tell you so rather than arrange it: see the FAQ below.
What lenders typically look for
There is no single answer, because there is no single lender. Every lender on our panel sets its own credit criteria and applies them to your file. What follows is the shape of what is usually assessed on a business vehicle facility, so you know what to have ready. It is not a checklist you can pass.
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An active ABN*
Sole traders, partnerships, companies and trusts all finance vehicles. The entity affects the paperwork and the guarantee, not whether the product exists for you.
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A trading history*
Most lenders want the business to have been trading for a minimum period. That minimum differs by lender, and some assess a newer business differently if the vehicle is the thing that earns the revenue.
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Genuine business use of the vehicle*
Not a formality. This is the line between the product we arrange and consumer credit, which we do not.
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The vehicle itself*
Type, age, kilometres, condition and its age at the end of the term. On this product the lender is assessing an asset as well as a borrower.
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ID, bank statements and evidence of trading*
Usually supplied directly or through a read-only data feed. If the entity is a company or a trust, expect questions about the structure.
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A director or owner guarantee*
Common on business vehicle finance. It means you are personally standing behind the loan, whatever the entity on the contract.
Industries
Industries we help fund
Whatever you do, the finance that fits depends on how your business actually trades. These are some of the industries we arrange funding for, each with its own guide.
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Agriculture & farming
Machinery, utes, inputs bought a season ahead, and repayments that can follow the harvest.
Agriculture finance -
Hospitality & cafés
Fit-outs, commercial kitchen gear, stock before the rush, and the quiet months in between.
Hospitality finance -
Retail & e-commerce
Buying stock before the season sells, fit-outs, and bridging supplier terms against your sales.
Retail finance -
Trades & construction
Tools, vehicles, materials up front, and bridging the gap between doing the work and being paid.
Trades & construction finance -
Health & allied health
Practice fit-outs, clinical equipment, hiring, and opening a second set of rooms.
Health finance -
Professional services
Hiring ahead of billings, office and technology, and bridging project-based invoicing.
Professional services finance -
Transport & logistics
Trucks and trailers, running costs, and carrying the gap between delivery and payment.
Transport & logistics finance
Customer stories
What business owners say about 121 Brokers
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5 out of 5
Financed a second vessel to grow the charter side of the business. The boat loan was structured around the tourist season so repayments ease off over winter. They understood a marine tourism operation better than my bank ever did. Smooth sailing from enquiry to funds.
Wayne D. Boat charter operator, Airlie Beach QLD -
5 out of 5
Cash flow in retail is lumpy, so a line of credit made far more sense for me than a lump-sum loan. I draw down when stock orders are due and pay it back after the season sells through. Having that buffer sitting there has taken so much stress out of running the shop. Only wish I'd set it up years ago.
Priya S. Retail store owner, Sydney NSW -
5 out of 5
My biggest client pays on 60-day terms and it was slowly strangling my payroll. Invoice factoring let me get most of the money up front instead of waiting two months. Now I can pay my contractors on time and take on bigger projects without sweating the gap. It changed how I run the business.
Sophie L. Marketing agency founder, Melbourne VIC
Testimonials reflect individual customers' experiences. Outcomes vary and depend on the lender and your circumstances.
121 Brokers Pty Ltd (ABN 37 674 323 712) is a finance broker, not a lender. We arrange finance through third-party lenders. Approval, interest rates, fees, timing and the funds themselves are set and provided by the lender, not by 121 Brokers.
FAQs
Vehicle finance questions, answered straight
Can a sole trader get business vehicle finance?
Yes. Sole traders with an ABN finance vehicles through most lenders, provided the vehicle is used wholly or predominantly for business purposes. Expect the usual: ID, bank statements and evidence of trading. If the vehicle is mainly for personal use, business vehicle finance is not the right product, and we will say so.
The practical difference for a sole trader is not the product, it is that there is no company to sit between you and the loan. You are the entity, so the assessment looks at you and the business as one thing. That is not a disadvantage, it is just a shorter conversation.
Chattel mortgage vs consumer car loan: what's the difference?
The purpose the vehicle is put to, and the law that applies as a result. A chattel mortgage is business-purpose finance for a vehicle used in a business. A consumer car loan is regulated credit for a personal vehicle, under the National Consumer Credit Protection Act. They are different products under different rules.
That distinction is not a technicality and it is not ours to bend. We arrange business-purpose finance only. If the vehicle is genuinely working in your business, this is your page. If it is your car and it occasionally carries a toolbox, a business facility is the wrong product regardless of what it does for your repayment, and no honest broker will dress it up as the right one. The declaration you sign about the vehicle's purpose is a real declaration.
What if the vehicle is part personal and part business?
Then the business-use proportion is the whole question, and it has two separate consequences. For finance: the vehicle has to be used wholly or predominantly for business for a business facility to be the right product. For tax: what you can claim follows the business-use proportion you can substantiate, which is your accountant's call, not ours.
Mixed use is normal and it is not a problem in itself: plenty of legitimate business vehicles do the school run occasionally. The problem is the other direction, a personal car with a business justification attached to it. If that is what you are describing, we will tell you, because the alternative is putting your name on a declaration that is not true. Where the line sits for your vehicle is worth checking with your accountant before you go looking for finance.
Drive it for the business. Finance it like you mean it.
Tell us the vehicle and how it will be used. We will show you what the lenders on our panel would do with it, model the balloon both ways on the actual quotes, and flag the structure points for your accountant before anything is signed.
An enquiry is a conversation, not an application. We won't submit anything to a lender without your say-so.
Buying a ute, van or truck for a business on the border? See business car finance in Tweed Heads.