Top 5 Loan Structures and When to Use Them

Not all loans are created equal—and the right structure can make or break your financial strategy. 

This guide breaks down the five most common business loan structures in Australia, their real-world use cases, and how to decide what works best for your business. 

Why Loan Structure Matters 

Business owners often compare loans based on interest rates alone—but in reality, the loan structure can have an even greater impact on your cash flow, tax benefits, asset ownership, and long-term flexibility. 

A well-structured loan: 

• Aligns with your income cycle 

• Matches the useful life of the asset or need 

• Maximises tax efficiency 

• Minimises strain on working capital 

Let’s explore the top 5 structures in the Australian market—and how to choose the right one at the right time. 

1. Chattel Mortgage 

Best for: Purchasing vehicles, machinery, or equipment 

Also known as: Asset purchase loan 

A chattel mortgage is one of the most tax-effective and popular loan types for businesses. Under this structure, you take ownership of the asset upfront, while the lender registers a mortgage over it until the loan is repaid. 

Key Benefits: 

• Immediate asset ownership 

• Full GST claim (if registered) at the time of purchase 

• Interest and depreciation deductions available 

• Option for balloon/residual payment to reduce monthly outgoings 

When to Use It: 

• You’re purchasing a vehicle or equipment that generates income 

• You want asset control from day one 

• You need to preserve working capital but still want tax benefits 

Example: A landscaping business purchasing two new commercial mowers on a 5-year chattel mortgage with seasonal payments. 

2. Line of Credit (LOC) 

Best for: Short-term cash flow flexibility 

Also known as: Revolving credit facility 

An LOC works much like a credit card—except typically with better terms. You’re approved for a fixed limit and can draw down funds when needed. As you repay, the funds become available again. 

Key Benefits: 

• Only pay interest on what you use 

• Continuous access to funding without reapplying 

• Ideal for variable working capital needs 

When to Use It: 

• You have seasonal income or irregular client payments 

• You need a buffer for day-to-day operations 

• You want flexibility without locking in a term loan 

Example: A café uses a $50K LOC to manage supplier bills and wages during slower winter months, then replenishes it during summer. 

3. Unsecured Business Loan 

Best for: Fast funding or smaller loan amounts 

Also known as: Cash flow loan or short-term business loan 

This loan type doesn’t require asset security, making it easier to access—especially for newer businesses or service-based industries. 

Key Benefits: 

• Quick approvals, sometimes within 24–48 hours 

• No asset collateral required 

• Flexible terms ranging from 3–36 months 

• Based on turnover, not profits 

When to Use It: 

• You need a quick capital injection 

• You’re launching a campaign, hiring staff, or buying inventory 

• You have no assets to secure a loan 

Example: A marketing agency uses an unsecured loan to fund upfront costs for a large project, with repayment aligned to the project’s client payment schedule. 

4. Equipment Finance / Lease 

Best for: Using equipment without upfront ownership 

Also known as: Finance lease, operating lease 

Equipment finance allows you to use the asset without buying it outright. Depending on the lease type, you may own it at the end, return it, or upgrade. 

Key Benefits: 

• Lower monthly payments than purchase 

• Option to upgrade equipment regularly 

• Keeps assets off the balance sheet (for some leases) 

• Tax-deductible lease payments (in many cases) 

When to Use It: 

• You work in a tech-heavy or equipment-dependent industry 

• You want to upgrade every 2–3 years 

• You want to preserve capital and keep liabilities low 

Example: A dental clinic leases diagnostic equipment with a buyout option after 3 years, preserving cash for expansion. 

5. Refinance or Debt Consolidation 

Best for: Restructuring existing finance for better terms 

Also known as: Business loan refinance, debt reset 

If you’ve already taken out one or more business loans, refinancing could save you money—or help you grow faster with less friction. 

Key Benefits: 

• Lower interest rates if your credit or financials have improved 

• Reduce monthly repayments by extending the term 

• Combine multiple debts into a single repayment 

• Free up cash for reinvestment 

When to Use It: 

• Your existing loan is no longer competitive 

• You’re managing multiple high-interest debts 

• You need to improve cash flow before taking on new finance 

Example: A logistics company consolidates three separate finance contracts into one facility—cutting monthly repayments by 30%. 

Final Thoughts: The Smartest Loan Is the One That’s Structured for You 

There’s no one-size-fits-all loan. The best structure depends on: 

• What you’re funding 

• How your business earns income 

• Your short- and long-term goals 

• The strength of your financial profile 

That’s why working with a broker matters. At Thrift Capital, we don’t just find loans—we help tailor structures that reduce risk, improve approval odds, and support smarter business growth. 

Ready to Find the Right Fit? 

Swith a Thrift Capital broker for tailored advice 

Download our Pre-Approval Checklist to get started 

Structure your finance smarter—and grow with confidence 

3 Finance Hacks to Maximise Q3

Q3 isn’t the time to slow down—it’s the time to optimise. 
Whether you're recovering from EOFY or planning for a strong finish to the year, a few smart financial moves can help you boost cash flow, build momentum, and gain more control over your growth strategy. 

Here are three actionable finance hacks to help your business make the most of Q3. 

Review Payment Terms: Shorten Receivables, Extend Payables 

Cash flow isn’t just about how much you earn—it’s also about when you get paid and when you pay others. 

Shorten your receivables: 
If your customers are paying you in 30 or 60 days, you’re carrying the cost. Consider: 

• Offering a small discount for early payment (e.g. 2% for payment within 7 days) 

• Automating invoicing and reminders 

• Setting firmer terms upfront for new customers 

Extend your payables: 
Work with suppliers who offer longer terms or more flexible repayment schedules—especially for large orders or inventory. 

These shifts can unlock thousands in working capital, without any external funding required. 

Leverage a Chattel Mortgage to Free Up Cash 

Need a new vehicle, tools, or equipment? Don’t pay upfront. 

A chattel mortgage allows you to: 

• Own the asset from day one 

• Spread the cost over time with structured repayments 

• Claim the GST upfront (if you’re registered) 

• Access tax deductions for interest and depreciation 

This is especially powerful in Q3 when: 

• You’ve got fresh financials on hand 

• You need to keep cash available for marketing, hiring, or restocking 

• You want to secure the asset now but pay as you grow 

Many lenders approve chattel mortgages within 24–48 hours—especially when arranged through a broker. 

Refinance Old Debt to Reduce Repayments 

If you're still managing loans from earlier years—or holding onto high-interest equipment finance—you might be paying more than you need to. 

Refinancing can: 

• Reduce your monthly repayments 

• Consolidate multiple debts into one 

• Improve your credit score through better repayment history 

• Free up cash for new projects 

Whether it’s an old business loan, vehicle finance, or an expensive overdraft, we can help assess if there’s a better deal on the table. 

Bonus Tip: Don’t Let Q3 Drift 

It’s easy to think of Q3 as the “quiet middle” of the financial year. But smart operators know it’s the perfect time to course-correct before Q4 gets busy. 

If you want to improve your business’s financial position, boost growth, or prepare for a new opportunity—now’s the time to act. 

Let’s Make It Happen 

At Thrift Capital, we help businesses improve their financial position with smart, fast solutions: 

• Finance for assets and equipment 

• Debt refinancing 

• Guidance for new ABNs or early-stage businesses 

Check-out our Pre-Approval Checklist or 
Speak with a broker to explore your Q3 finance options. 

Chattel Mortgage Benefits You Can Still Access Post-Tax Time

Think the EOFY deadline was your last chance to secure tax savings through finance? Not quite.

Even after June 30, chattel mortgages continue to offer significant GST and tax benefits—especially if you’re purchasing business equipment, vehicles, or machinery.

Here’s what Australian businesses need to know about making smart finance moves after tax time.

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What Is a Chattel Mortgage?

A chattel mortgage is a type of business loan where the lender provides funds for an asset (e.g. vehicle, equipment), and the business takes immediate ownership. The asset is used as security, and the mortgage is released once the loan is repaid.

It’s one of the most popular asset finance structures in Australia—particularly for small to medium businesses.

According to the Australian Bureau of Statistics (ABS):

• 85% of Australian small businesses finance capital purchases rather than buying outright.

• Vehicle and equipment finance makes up a large portion of commercial loans, especially post-COVID, with government incentives further accelerating uptake.

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Why Post-June 30 Still Matters

There’s often a rush to settle loans by June 30 to lock in deductions for the closing financial year. But even after EOFY, many benefits still apply, especially for purchases that support new-year growth plans.

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Key Tax and GST Benefits You Can Still Access

1. GST Input Credits 

If your business is GST-registered: 

• You can claim the full GST on the purchase price in your next BAS—even if the asset is financed via chattel mortgage. 

• This applies to cars, trucks, machinery, office equipment, etc. 

Example: For a $100,000 asset (ex-GST), you can claim $10,000 in GST credits in the next BAS cycle—improving cash flow significantly. 

2. Depreciation and Interest Deductions 

Even if EOFY has passed: 

• The interest portion of repayments is tax-deductible. 

• You can claim depreciation on the asset annually through your tax return. 

According to ATO guidelines, depreciation can be applied to any business-use asset with a life over one year—even if financed.  

3. Instant Asset Write-Off / Temporary Full Expensing 

While the Temporary Full Expensing scheme ended in June 2023, the government has proposed new thresholds for the Instant Asset Write-Off from 1 July 2023 to 30 June 2024: 

• Eligible businesses (turnover under $10 million) may deduct up to $20,000 per asset purchase. 

• Check ATO updates for confirmation and updates.

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Perfect for Equipment & Vehicle Upgrades 

Chattel mortgages remain ideal for financing: 

• Commercial vehicles 

• Construction machinery 

• Medical or industrial equipment 

• Tools and technology   

They’re especially effective when your business wants ownership of the asset rather than lease-style usage, with long-term deductions. 

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Global Context: Still Relevant Worldwide   

Globally, businesses in the UK, US, and Canada also benefit from similar structures, like hire purchase or secured equipment loans. However, Australia’s GST and depreciation rules make chattel mortgages uniquely beneficial—particularly for small businesses looking to improve post-COVID cash flow. 

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Why Work With a Broker Like Thrift Capital? 

Each lender may treat asset classes, repayment terms, or business types differently. At Thrift Capital: 

• We match you with lenders who understand your industry 

• We know what documentation is truly required (no unnecessary paperwork) 

• We help you secure approvals fast—often within 48 hours for qualified applications 

Next Steps: Make Your Finance Work Harder 

Even after June 30, the benefits are far from over. 

Thinking about an equipment upgrade? 

Talk to a Thrift Capital broker today to explore your options, or 

Checkout our free Pre-Approval Checklist to get started. 

Lease vs Finance: Which One is Right for Your Business?

If you’re running a business and planning to finance equipment, vehicles, or other assets, one key question comes up often:

Should I lease or should I finance? Is there even a difference?

At Thrift Capital, we help business owners across industries make this decision every day. The right option depends on your cash flow, growth plans, and how long you expect to keep the asset.

This guide breaks down the pros and cons of leasing vs. financing to help you choose the best path for your business.

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What Is Leasing?

Leasing is essentially renting the asset for a set period. You make monthly or quarterly payments, but the lender retains ownership. At the end of the lease, you may return, upgrade, or purchase the asset—depending on the agreement.

Best suited for:

• Businesses needing frequent equipment upgrades

• Companies with limited upfront capital

• Those seeking off-balance-sheet finance options

Benefits of Leasing:

• Lower initial outlay

• Easier approval for some structures

• Potential tax advantages on lease payments

• Greater flexibility to upgrade over time

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What Does Financing Mean?

When you purchase a business asset using finance (such as a Chattel Mortgage), your business owns the asset from day one. The loan is secured against the asset, and you repay it over time.

Best suited for:

• Businesses looking for long-term ownership

• Industries like transport or trades needing equity in equipment

• Owners wanting more control over the asset’s use or resale

Benefits of Leasing:

• Full ownership = long-term value

• Interest and depreciation may be tax-deductible

• May be eligible for upfront GST claims (if GST-registered)

• Flexible terms and balloon payment options

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Lease vs Finance: Quick Comparison

When you lease, you don’t own the asset—you’re essentially renting it over a fixed term. This typically comes with lower upfront costs and greater flexibility to upgrade when needed. Lease payments may also be tax-deductible, depending on your setup. At the end of the lease, you may return the asset, upgrade, or choose to purchase it, depending on your agreement.

When you buy—usually through a Chattel Mortgage—you own the asset from day one. This option often involves a higher upfront cost (unless you structure it with a balloon payment), but it gives you long-term value. You may be able to claim interest and depreciation as tax deductions, and if you’re GST-registered, you could be eligible to claim GST upfront. Unlike leasing, buying gives you full control over the asset at the end of the finance term.

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So… Should You Lease or Finance?

Ask yourself:

• Do I need flexibility with cash flow right now?

• How long will I use this asset?

• Is ownership important for my business strategy?

• What are the tax implications? (Speak with your accountant.)

The right structure depends on your business goals—and getting it wrong could cost you more in the long run.

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Need Help Deciding?

We’re here to help.

Thrift Capital brokers explain the options clearly—without jargon. Whether you’re buying a truck, leasing medical equipment, or financing a fit-out, we’ll match you with the right lender and structure to suit your business.