term of a Chattel Mortgage can range form 12 months to 60 months
fixed interest rate applies
ownership of the asset is transferred to the client at time of purchase
payments can be made weekly, monthly, quarterly, yearly or structured (i.e. agreed payments over different times of the year)
balloon payment at the end of the term can be applied to the loan to reduce monthly payments
client can contribute a deposit towards the purchase (either through trade in or cash) or fund 100% of the cost of the asset
depreciation and interest is claimed as a tax deduction at the end of the financial year on customers profit and loss statement
full gst on the purchase price claimed as a gst off-set on next lodged business activity statement
Benefits of a Chattel Mortgage
financing heavy equipment using a chattel mortgage loan product as opposed to using own funds, will preserve cash flow to maximise working capital position
flexible payment options allows clients to make payments suitable to their cash flow
fixed payments allow businesses to accurately project income and expenses going forward
option of a balloon payment at the end of the term reduces payments over the term of the loan
chattel mortgage loans for heavy vehicles can be assessed on either a full doc or low doc basis
as these types of loans use the equipment as security, it allows clients to free up property equity to pursue other investment opportunities
balloon payment can be paid out at the end of term (by way of trade in or cash payment) or refinanced (by way of new loan agreement)
