What Is a Commercial Goods Loan?
A commercial goods loan is a business finance product where a lender provides funds to purchase a moveable asset (equipment, vehicle, machinery), and the borrower takes ownership from day one. The lender holds a charge over the asset until the loan is repaid.
The label is often used for asset-secured business finance with features similar to a chattel mortgage. Product names are not standardised, so the written contract—not the marketing label—determines ownership, security, fees, tax treatment and end-of-term obligations.
Compare the Contract, Not the Name
A “commercial goods loan”, “business loan—goods”, “goods loan” or “chattel mortgage” may use a similar ownership model, but do not assume the contracts are identical. Check the borrower and owner, security, fees, balloon, guarantees, payout calculation and tax consequences.
Why Did Banks Rename Chattel Mortgage?
The term "chattel mortgage" is a legal term dating back centuries. "Chattel" means moveable property, and "mortgage" refers to the security interest held by the lender. While accurate, banks found that many business borrowers were confused by the terminology — especially the word "mortgage", which most associate with property.
The rebrand to "commercial goods loan" makes the product more intuitive:
- Commercial — it's for business use
- Goods — it finances moveable assets (not property)
- Loan — you borrow money and repay it, with ownership from the start
The plain-language label does not guarantee a particular legal structure, PPSR registration, tax treatment or document set. Those features must be verified in the actual agreement.
Calculate Your Repayments
Enter your asset price, term, and rate — see weekly/monthly payments and Year 1 tax deductions.
Open Calculator →How a Commercial Goods Loan Works
- Choose your asset — new or used truck, ute, equipment, or machinery
- Apply for finance — through your bank, a specialist lender, or a finance broker
- Lender pays the seller — the full purchase price (minus any deposit)
- You own the asset immediately — registered in your name from settlement
- Make regular repayments — fixed weekly or monthly payments over the loan term (typically 2–7 years)
- Optional balloon payment — a lump sum at the end to reduce your regular payments
- Charge is removed — once the loan is fully repaid, the lender's interest is discharged
Tax Benefits
Commercial goods loans (chattel mortgages) offer three key tax advantages for Australian businesses:
1. GST Input Credit (Upfront)
An eligible GST-registered business may claim the creditable business-use portion when the normal tax-invoice and attribution requirements are met. Private use, car limits and other restrictions can affect the amount or timing.
2. Interest Deductions
The business-use interest component may be deductible, subject to the arrangement, current tax law and your circumstances. Confirm the treatment with a registered tax agent or accountant.
3. Depreciation
As the legal owner, you depreciate the asset over its effective life (as set by the ATO). When the instant asset write-off is available, eligible assets can be fully deducted in Year 1.
Tax deductions depend on your individual circumstances, business-use percentage, and current ATO rules. Always consult a qualified tax professional.
Commercial Goods Loan vs Other Structures
| Feature | Commercial Goods Loan (Chattel Mortgage) |
Finance Lease | Operating Lease |
|---|---|---|---|
| Ownership | You — from day 1 | Lender (you at end) | Lender |
| GST | Eligible credit may arise on acquisition | Eligible credits may arise with payments | Eligible credits may arise with payments |
| On Balance Sheet | Yes | Yes (AASB 16) | Depends on term |
| Depreciation | You claim | You claim (AASB 16) | Lessor claims |
| Interest Deductions | Yes | Yes | N/A (rental deduction) |
| End of Term | Own outright | Pay residual or return | Return asset |
| Instant Asset Write-Off | Eligible | Not applicable | Not applicable |