Chattel Mortgage
Chattel Mortgage’s allow you to lower your monthly repayments with a residual or “Balloon” payment and take ownership of the equipment or vehicle. While the equipment is owned by the business, the lender uses the equipment or vehicle as security against the loan.
What's the difference between a Chattel Mortgage and a Finance Lease?
The key difference between a Chattel Mortgage and Finance Lease is “ownership”. With the Chattel Mortgage, the lender advances the funds to the borrower to buy and own the asset and registers a mortgage against the purchase. Once the Mortgage is paid, the asset title is transferred to the business. With a Finance Lease, the lender still owns the asset but the borrower has the option to purchase the asset at the end of the lease. The main difference between these two options are ownership and how GST is charged on the transaction.
What are the benefits of a Chattel Mortgage?
- Provided the equipment is used 100% for business purposes, you are able to claim the interest paid on the facility and depreciation on the equipment as a tax- deduction*.
- A Business that is registered for GST may claim the GST in the purchase price of the equipment as an input credit on their next Business Activity Statement (BAS)*.
- They can improve your Business’s cash flow by reducing your monthly repayments.
*The above should be used as a guide, please contact your accountant or Financial adviser to see what is applicable to your business.
Other services
We offer a wide range of services to meet every type of business.
We’re here to help!
