Vehicle finance · Sole traders and companies
Car finance for your business.
Buying a vehicle through a business is a different exercise from buying one personally. There is more than one way to structure it, the structures behave differently, and the tax consequences are your accountant's call rather than ours. What we do is find the finance and explain the mechanics plainly, so the conversation with your accountant is a short one.
Start here
The two structures you'll hear about most.
Most business vehicle finance in Australia is arranged one of two ways. The difference between them is not the interest rate. It is who owns the vehicle, and everything else follows from that.
A chattel mortgage
Your business buys the vehicle and owns it outright from the moment it is delivered. The financier lends the money and registers a security interest over the vehicle — the "chattel" — so if the loan isn't repaid, they have a claim on it. The vehicle sits on your books as an asset and the debt sits there as a liability. When the loan is finished, the security is released and nothing changes hands, because the vehicle was already yours.
A lease
The financier buys the vehicle and owns it. Your business pays to use it for an agreed term. What happens at the end depends entirely on the type of lease and what the contract says — it might involve a residual amount, an option to buy, handing the vehicle back, or re-financing what's left. Leases are not all the same product, and the label on the brochure tells you less than the terms inside it.
| Question | Chattel mortgage | Lease |
|---|---|---|
| Who owns the vehicle? | Your business, from day one. | The financier, for the term of the lease. |
| Where does it sit? | On the business balance sheet as an asset, with the loan as a liability. | Depends on the type of lease and the accounting standards that apply to your business. |
| What is registered? | A security interest over the vehicle, recorded on the PPSR. | The financier's own ownership, plus any interest they register. |
| What happens at the end? | The security is released. You keep a vehicle you already owned. | Set by the contract — a residual, a purchase option, a return, or a refinance. |
| Selling it early | Yours to sell, but the financier must be paid out and the security released first. | Not yours to sell. Ending a lease early is a conversation with the financier. |
| Tax treatment | A question for your accountant, in both cases. GST, depreciation and what is deductible all work differently depending on the structure, how the vehicle is used and your business's own circumstances. We do not answer this, and you should be wary of anyone selling you finance who does. | |
This is the single most common expensive mistake we see. A business picks a structure at the dealership on a Saturday because it was the one in front of them, then finds out at tax time that a different one would have suited them better. By then the contract is in place. Your accountant knows your entity, your GST position, your other assets and what you're planning next — none of which is visible from a finance application. Ring them first. It usually takes one phone call.
The assessment
What a lender generally looks at.
The business itself
How long it has been trading, what it actually does, and whether the ABN and GST registration line up with that story. A business with a longer track record is easier to assess than one that started recently, though a short history isn't the end of the conversation.
How income is documented
Financials, tax returns, BAS lodgements, bank statements — the paperwork that shows money coming in and what the business keeps. Sole traders and companies document this differently, which is part of why they're often assessed differently too.
The vehicle and the commitments
Age, type and what it's worth, since it's the security. Alongside that, the existing debts the business already carries and the directors' or owners' own position, which for a small business is rarely separable from the business's.
Worth understanding
A sole trader is not a company.
They're often spoken about together as "business finance", but they're different legal animals and lenders treat them differently. We're not going to tell you how any particular lender treats each, because that varies and it changes — but the reason for the difference is worth knowing.
A sole trader is the business. There's no separation between you and it, so your personal position and the business's position are the same position. A company is a separate legal entity that borrows in its own name, usually with directors standing behind it. That's a genuinely different assessment, using different documents, and sometimes different products entirely.
If you're a sole trader thinking about whether to run the vehicle through the business at all, that question sits with your accountant too. Sometimes the answer is that a straightforward personal car loan is simpler and suits you better. We'd rather tell you that than sell you a structure you didn't need.
Business use percentage
If a vehicle is used partly for the business and partly for private trips, that split matters — and it's your job to work it out honestly and be able to show how you arrived at it. A logbook, or whatever method your accountant tells you to use, is not paperwork for its own sake. It's the evidence behind the position you take.
Inflating a business use figure because it produces a better outcome on paper is a bad idea for reasons that have nothing to do with finance. Record what actually happens. If the honest number is lower than you hoped, that's a real input into whether this purchase makes sense at all.
Get ready
What to have handy.
You don't need all of this to start a conversation — only to finish one. Business files stall on missing paperwork more often than they stall on anything else.
The honest bit
Decisions worth making slowly.
Once the structure is settled with your accountant, a few choices are left to you. None has a universally right answer, but each one has a trade-off people tend to notice only afterwards.
- The balloon or residual. A lump sum parked at the end of the term lowers the regular repayment, which helps a business managing cash flow. It also means you're still carrying a debt on a vehicle that has been working hard for years, and you'll need a plan for it — pay it, refinance it, or sell the vehicle and hope the two numbers meet. Decide how you'll handle it before you sign, not in the final quarter.
- Term length. A longer term costs less each month and more overall. On a vehicle that will be worked hard, there's a second question: whether the finance outlives the useful life of the thing it's paying for.
- Buying more vehicle than the work requires. Running a purchase through the business can make an expensive vehicle feel like a smaller decision than it is. The repayment is still a real repayment, drawn from the same account that pays wages and suppliers.
- Dealer finance versus comparing lenders. Dealer finance is convenient and sometimes competitive. It is also one option presented as though it were the only one. It costs nothing to see what else is available before you commit.
- Timing around tax. Rushing a purchase to land before a particular date is a decision to make with your accountant, on the numbers, and not because a salesperson mentioned it. If the vehicle isn't needed, no tax outcome makes buying it a saving.
Work out what the business actually needs, then talk to your accountant about structure, then compare finance. Doing it in that order takes an extra day or two. Doing it in reverse can lock in an arrangement that's awkward to unwind and costs real money to fix.
Common questions
Business car finance, answered.
Should I use a chattel mortgage or a lease?
Whichever one suits your business — and that isn't a question a website can answer for you. The two differ on ownership, on how the arrangement appears in your accounts, on what happens at the end of the term, and on tax treatment. Your accountant knows your entity, your registrations and your plans. Ask them which structure fits, then come to us to arrange it. We'll explain how each product works mechanically as often as you'd like.
What can I claim on a business vehicle?
We won't answer that, and we'd be uneasy about a finance provider who would. Deductibility, GST and depreciation depend on the structure you choose, how the vehicle is genuinely used, and your business's own circumstances — including things about your entity that never appear on a finance application. Your accountant is the right person, and the conversation is best had before you commit to a structure rather than afterwards.
How long does my business need to have been trading?
There isn't one figure, and any number quoted at you is one lender's policy on one day. Longer trading history generally makes a file easier to place; a newer business isn't automatically excluded, but it narrows the field and other evidence carries more weight. Tell us how long you've been going and we'll tell you where that puts you.
I'm a sole trader. Is this different for me?
Often, yes. A sole trader isn't a separate legal entity from you, so your personal position and the business's are one and the same, and the documents used to assess it differ from a company's. How individual lenders treat that varies, so we won't generalise. It's also worth asking your accountant whether running the vehicle through the business is right for you at all — sometimes a personal car loan is the simpler answer.
What if the car is used for both business and private trips?
That's common and perfectly normal. What matters is that the split is worked out honestly and that you can show how you got there — a logbook, or whichever method your accountant asks you to keep. The apportionment affects the tax side, which is their territory, not ours. Our advice on it is narrow and firm: record what actually happens rather than what you'd prefer the number to be.
Can I finance a used vehicle, or buy from a private seller?
Both are usually possible, though the vehicle's age and condition affect which lenders will fund it, since it's the security. Private sales bring extra checks — confirming nothing is owing against the vehicle, verifying the seller, and handling settlement properly. Tell us what you've found and we'll tell you whether it can be financed the way you want to buy it.
Do I have to give a personal guarantee?
For company borrowing it's common for directors to be asked to guarantee the debt, though whether it's required depends on the lender and the file. A guarantee means you're personally responsible if the company doesn't pay, which is a serious commitment and worth reading properly rather than initialling. We'll tell you upfront whether one is being asked for, before you're at the signing stage.
What rate will the business pay?
We won't put a number in front of you before we've seen the file, because it would be invented. Pricing on business vehicle finance moves with the entity, the trading history, the vehicle, the term and the structure. Once we know your situation we'll lay the genuine options side by side and explain why they differ — including the ones where the cheapest headline isn't the best arrangement.
Let's talk
Tell us about the business. We'll do the comparing.
No cost, no obligation, and nothing lodged with a lender until you say so. Bring your accountant into it early — we're happy to talk to them directly so the structure and the finance are decided together rather than in sequence.
The Finance Team is the trading name of Online Showroom Pty Ltd. We are a credit broker rather than a lender, operating under Australian Credit Licence 551493. Nothing here is tax advice, an offer of credit, or a recommendation to borrow — tax questions belong with your accountant. Any figures we discuss with you are estimates only, and every application is subject to full assessment and approval by the lender.
Prefer to get started now?
The online application takes a few minutes and gives a broker what they need to look at the business properly. You can still change the structure afterwards, once your accountant has weighed in.
Apply nowOr use the call back form at the top of this page and we'll come to you.