If you are a business owner looking to finance a vehicle or piece of equipment through a chattel mortgage, you have probably noticed something has changed. The major banks are not as eager to lend as they once were, and the alternatives are growing fast.
Through FY26, Australia’s commercial lending landscape shifted in a meaningful way. Traditional banks tightened their criteria, while non-bank and specialist lenders expanded their reach, improved their turnaround times, and started saying “yes” to applications that the Big Four would not touch. For business owners in Melbourne’s west and across Victoria, this shift creates both a challenge and an opportunity.
Here is what is actually happening, and what it means for your next chattel mortgage application.
How Bank vs Non-Bank Commercial Lending Shifted in FY26
The gap between bank and non-bank lending widened noticeably over the past financial year. Major banks raised the bar on commercial lending approvals, often requiring longer trading histories, more documentation, and cleaner credit profiles.
Non-bank lenders moved in the opposite direction. According to Valiant Finance’s Q3 2025 data, average and median interest rates for asset finance sat between 10.39% and 11.05%, slightly lower than the same quarter in the prior year (Valiant Finance, November 2025). Settlement rates across the broader market also trended upward, with Valiant reporting an uplift to 18% for all opportunities generated in 2024, compared to 16.1% in 2023.
Meanwhile, Metro Finance capped off FY26 by surpassing $6 billion in loan book value, having now provided more than $10 billion in total lending to over 120,000 Australian customers since 2011 (Broker Daily, July 2026). That kind of growth from a single non-bank lender tells you where the momentum is heading.
The Australian Finance Industry Association (AFIA) confirmed the broader trend in its June 2026 report, noting that motor finance non-bank lenders provided $24.4 billion in loans during 2025 alone, helping more than 507,000 Australians purchase vehicles.
Why Non-Bank Lenders Approve Businesses That Banks Decline
The core difference comes down to how risk is assessed. Major banks tend to rely on standardised credit scorecards. If your business does not tick every box, the answer is usually no, regardless of how strong your actual cash flow looks.
Non-bank lenders take a more holistic approach. Here is what that means in practice:
- Shorter trading history accepted. Many non-bank lenders will consider businesses that have been trading for as little as 6 to 12 months, whereas most banks require a minimum of two years.
- Bank statement-based assessment. Rather than demanding two years of tax returns and accountant-prepared financials, non-bank lenders often assess your application using recent bank statements and BAS lodgements.
- Sector understanding. Specialist non-bank lenders understand industries like transport, construction, and trades. They know that a subcontractor’s income pattern looks different from a salaried employee’s, and they underwrite accordingly.
- Flexible credit assessment. A past default or a lower credit score does not automatically disqualify you. Non-bank lenders weigh the full picture, including current income, asset quality, and repayment capacity.
For business owners across Melbourne’s western suburbs and beyond, this is a significant advantage, particularly for sole traders, subcontractors, and newer businesses that struggle with traditional bank requirements.
What a Chattel Mortgage Looks Like: Non-Bank vs Major Bank
Not all chattel mortgages are created equal. The structure may be the same (you borrow to purchase a vehicle or asset, you own it from day one, the lender takes a mortgage over the chattel as security), but the experience of getting one varies significantly depending on where you apply.
| Major Bank | Non-Bank Lender | |
| Turnaround time | 5 to 10 business days, sometimes longer | Often 24 to 48 hours for straightforward applications |
| Documentation | Full financials, tax returns, ATO portal access | Bank statements, BAS, ABN verification in many cases |
| Balloon payment flexibility | Limited options, often capped | More flexible balloon and residual structures |
| Credit history requirements | Clean credit typically required | Considers the full financial picture |
| Trading history | Minimum 2 years preferred | Some lenders accept 6 to 12 months |
For businesses that need to move quickly on a vehicle purchase (say, a truck or a piece of equipment that will generate revenue from day one) the speed difference alone can be the deciding factor.
The Role of an Asset Finance Broker
This is where a broker adds genuine value. A good asset finance broker does not just submit your application to one lender and hope for the best. They work across both bank and non-bank panels, matching your profile to the lender most likely to approve your application on the best available terms.
At Riverwalk Finance, we work across more than 30 banks and non-bank lenders. That means we can place your chattel mortgage with whichever lender offers the strongest combination of rate, terms, turnaround, and flexibility for your specific situation. You get access to options the Big Four simply will not offer.
If you are unsure where to start, our how it works page walks through the process from first enquiry to settlement.
What to Ask When Comparing Chattel Mortgage Offers
If you are weighing up offers from different lender types, here are the questions worth asking:
- What is the total cost of the loan, not just the headline rate? Factor in fees, charges, and any ongoing costs.
- Is a balloon or residual payment available, and how does it affect the overall cost?
- What is the actual turnaround time from application to settlement?
- What documentation will I need to provide, and can the lender work with low-doc applications?
- Will the lender report my repayment history to credit bureaus? (Most reputable non-bank lenders do, which helps build your credit profile over time.)
- Can I refinance from this lender to a bank later if my circumstances change?
3 Signs Your Chattel Mortgage Application Is More Likely to Be Approved by a Non-Bank
Not every application belongs with a non-bank lender. But if any of the following apply to you, a non-bank is almost certainly your better option:
- Your business has been trading for less than two years. Banks rarely approve businesses without at least 24 months of trading history. Non-bank lenders regularly finance businesses with 6 to 12 months on the books.
- You cannot provide full financial statements. If you are a sole trader, subcontractor, or ABN holder without accountant-prepared financials, a low-doc non-bank lender is built for your situation.
- You have a past credit issue. A paid default, a missed payment, or a lower credit score does not mean the end of the road. Non-bank lenders assess the whole picture and can often find a path to approval.
Frequently Asked Questions
Are non-bank lenders safe?
Yes. Reputable non-bank lenders in Australia are regulated by ASIC and must comply with the same responsible lending obligations as banks. They fund their lending through institutional capital markets, not depositor funds, but your loan contract carries the same legal protections.
Do non-bank lenders report to credit bureaus the same way?
Most established non-bank lenders report to major credit bureaus such as Equifax and illion. This means your positive repayment history contributes to your credit score, just as it would with a bank loan.
Can I refinance from a non-bank to a bank later?
Absolutely. Many business owners start with a non-bank chattel mortgage while their business is young or their credit profile is being rebuilt, then refinance to a bank product once they qualify. A broker like Riverwalk Finance can help you plan for this from day one.
What is a chattel mortgage in Australia?
A chattel mortgage is a finance arrangement where a lender provides funds to purchase a business asset such as a vehicle or equipment. The borrower takes ownership immediately, while the lender holds a mortgage over the asset until the loan is repaid.
Can a new business get a chattel mortgage?
Yes. Many non-bank lenders approve chattel mortgages for businesses that have been trading for as little as six months, using bank statements and BAS rather than full financial statements for assessment.
What is the difference between a chattel mortgage from a bank and a non-bank lender?
Non-bank lenders typically offer faster approval, require less documentation, accept shorter trading histories, and provide more flexible balloon payment options compared to major banks.
