A Chattel Mortgage is a particular type of finance used by businesses
for the purpose of purchasing a new or used vehicle or other business
equipment.
Chattel Mortgage is essentially a Mortgage over goods to be financed.
Chattel Mortgage is classed as a cash sale in that the goods automatically
become yours on purchase and the finance company takes a mortgage over
the chattels. However for tax purposes you can claim depreciation, running
costs and interest paid, against your business income. The Chattel Mortgage
allows businesses to claim the full input tax credit from GST incurred
expenses immediately (next BAS statement). Always seek advice from your
accountant in regard to this.
The Chattel mortgage is a very flexible finance option, in that, you have
the ability to either finance the full purchase price or alternatively,
you can include an upfront deposit or trade-in to reduce your rental commitment,
while a Residual payment may also be placed at the end of the term (much
like a lease residual) to represent the vehicles end value. Alternatively,
you may choose to structure your rentals to clear the debt in full over
the term of your agreement (fully amortised).
Chattel Mortgage - Benefits
- Interest charged and depreciation of the vehicle are tax deductible
- No capital outlay is required and cashflow protected
- Terms can be flexible and fixed repayments make for easy future budgeting
- After full payment of the chattel mortgage agreement, ownership of
the goods is transferred to you.
- You have the option to make payments with or without a ballon payment
at the end of the term.
Chattel Mortgage - Applying
Applying for a chattel mortgage agreement with Fincar is easy. We do all
the hard work for you - can assist with selection of the right product
for your requirements, prepare the all paperwork and submit it to the
appropriate lender. As a broker we are not limited to any particluar finance
company - we can shop around for the lowest interest rate, help you avoid
'hidden' fees and charges and most of all prepare the paperwork with the
minimum of fuss and maximum of professionalism. |
