A Chattel Mortgage works much in the same way a commercial loan does – you pay back the loan in instalments on a monthly basis. You can lower your monthly repayments with a residual value or “Balloon” payment.
Benefits of a Chattel Mortgage
- Provided the equipment is used 100% for business purposes, you are able to claim the interest paid on the facility and depreciation on the equipment as a tax- deduction
- If the Business is registered for GST, you may be eligible to claim some or all of the GST upfront, rather than over the term of the loan.
- Deposits are optional but not generally required, and you can buy the equipment at any time during the agreement. You may also choose a balloon payment at the end of the term to decrease your monthly commitments.
* The above should only be used as a guide, please contact your Accountant or Financial Adviser for more information