Chattel mortgage

A: A Chattel Mortgage is a term used to describe secured finance provided to a business to obtain an asset.

A: The financier will advance funds to you and your business to obtain the asset, so that you can take possession of that asset right away. The financier will then place a security on that asset whilst it is being paid off. Once the finance is paid off, the security is removed giving you full and clear ownership of the asset.

A. The benefits of a Chattel Mortgage include: 

• Flexible terms – usually between 1 and 7 years
• Choice of interest options – fixed or variable
• Options to add a balloon payment to the end of term to lower your repayments
• A tax deduction may be available if the asset is being used for business purposes (check with your accountant for eligibility)
• If you are registered for GST, you can claim the GST on the vehicle price on your next BAS.

A. A Balloon Payment is a residual payment added to the end of your loan term, which brings your loan repayments down. This may help with cash-flow during the course of your loan.