A chattel mortgage is a type of finance used by sole proprietors, partnerships and companies to purchase vehicles or equipment.
Chattel mortgage is an attractive finance option for businesses. It is essentially a mortgage over goods to be financed – providing you with immediate ownership of the equipment.
Leasecorp provides flexible chattel mortgage options – you may either finance the full purchase price, include an initial deposit to reduce your repayment commitment or include a balloon at the end of the finance term.
The chattel mortgage allows the GST component of the acquisition price of the motor vehicle (or other asset) to be claimed back on the entity’s next Business Activity Statement, rather than claiming the GST over the term of the finance contract.
Benefits of a chattel mortgage
Benefits of a chattel mortgage include:
- Interest charged and depreciation of the equipment are tax deductible
- No capital outlay required and flexible terms
- Cashflow is protected
- Immediate access to equipment
- Ownership is transferred to you upon completion of the terms
- Option to make payments with or without balloon payment at the end of the term