Chattel Mortgage

The Chattel Mortgage is appropriate to finance goods used for business more than 50% of the time. You (the customer) take ownership of the goods upon delivery, and the financier is able to secure the loan by registering a charge over the goods. Chattel mortgages are best for businesses that are running on a “cash” basis for GST purposes. This enables them to reclaim the GST paid on the purchase at the next Business Activity Statement.

Who can benefit

Any person or business seeking a loan to acquire plant and equipment, motor vehicles, or similar goods used in the production of assessable income.

Key Features

You hold the title to the goods.
100% finance can be provided.
Repayment schedules are flexible and can be structured to suit your cash flow.
Balloon payments at the end of the term, similar to a lease residual value, can be arranged.
A Chattel Mortgage may provide tax benefits if the financed goods are used to produce assessable income.
The term of the Chattel Mortgage is flexible and can be negotiated, subject to approval (maximum term 60 months).

Benefits

You own the title to the goods from the beginning of the contract.
You can obtain the goods for a minimal capital outlay.
You can match repayments to seasonal cash flow.
You can pay lower installments during the term of the contract and make a balloon payment at the end of the term.
You may be able to make use of taxation benefits if the goods are used to generate taxable income.

GST

GST is payable on the initial purchase of the goods, but the repayment amounts are exempt.

Interest rates

The interest rate depends on the amount being financed and the security of the applicant. It is fixed throughout the term of the loan.

Fees and charges

Establishment fees are payable with no applicable GST.
If you require a cash booklet, additional charges apply.
An ASIC fee is applicable for companies (this varies between states).

Repayment Schedule

Repayments can be made:

Monthly
Yearly
Quaterly
Semi Anually
Seasonally
Irregular repayments