What Is Chattel Mortgage?
Chattel mortgage is term referring to a loan granted to a business on a moveable asset (i.e not a plot of land or building), usually a car, vehicle, or other piece of equipment for the company.
When Is Chattel Mortgage Appropriate?
A chattel mortgage is appropriate to finance goods which have an intended use primarily for business purposes, of course, the customer can take ownership of the goods and use thereof upon delivery.
Who Can Benefit From Chattel Mortgage?
Anyone wishing to finance the purchase of goods for business purposes. This includes businesses, companies, partnerships and sole traders operating in Australia. You can purchase commercial vehicles including cars, vans and other business equipment.
Chattel Mortgage Key Features
- The title of the goods is held in your name
- 100% finance can be provided by Natloans
- Customised repayment schedules are flexible and tailored to meet your individual circumstances
- A balloon or residual payment at fruition of the loan contact is available
- A Chattel Mortgage may provide tax benefits if the financed goods are used to produce assessable income
- Businesses which collect GST on a cash basis can claim an Input Tax Credit for the GST on the purchase price of the chattel mortgage. You can do this on your business’s next Business Activities Statement (BAS)
- In Australia, most of our states require stamp duty to be paid on the repayments of the chattel mortgage
- The term of the chattel mortgage is flexible and can be negotiated, subject to our approval (maximum term 60 months)
Chattel Mortgage Benefits
- You own the goods from the beginning of the chattel mortgage contract
- You can obtain the goods for a minimal capital outlay
- Seasonal cash flow can be incorporated into your repayment schedule
- A balloon or residual payment can be set up at the start of the chattel to decrease the interest paid
- You can pay lower instalments during the term of the contract and make a balloon payment at the end of the term
- Tax benefits are available to business if the asset generates a taxable income.
You get ownership of the goods on delivery and we’ll take a charge over the goods. Otherwise this product is very similar to a Commercial Hire Purchase, although the fee structure is a little more complicated. Calculate your chattel mortgage repayments.