What is a chattel mortgage?

Chattel Mortgages are a business loan facility, available to the Self Employed including Sole Traders, Parternships, Company and Trust borrowers.

The Lender will pay the Supplier the funds, and you will take possession of the goods. The Lender will take security over the goods you are purchasing, and when the loan is repaid you will own them.

They are a facility commonly used by business, for funding their purchases.

The benefits of a chattel mortgage

• Fixed Interest Rates

• Tax Benefits associated to the purchase*

• Depreciation and Interest deductions*

• Balloon Values

• 7 year loan terms

• Low Doc Loans are available.

Who is eligible for a chattel mortgage?

• ABN holders using the asset they are purchasing predominantly for business purposes

• Sole Traders

• Partnerships

• Companies

• Trusts.

• PAYG Applicants receiving a Car Allowance.

*discuss any tax related issues with your tax advisor/accountant.

Common Questions:

Do you need an ABN?

Yes, unless you are an employee of a business receving a car allowance.

Is GST Registration required?

No, if your turnover is below the thresholds required to register for GST.

Is Low Doc Available?

Yes it is, if you meet the other lender requirements.

Is a 7 year loan term available with a Residual Value?

No, you can choose a 7 year loan term or a max term of 5 years with a residual value.

Are there early repayment penalties?

Yes. these can be substantial if you repay the loan prior to the expiry. The quantity is unknown at inception of the loan, and varies between lenders. It can equate to the full interest charges initially agreed in the Chattel Mortgage contract.

Do i own the Goods at the end of the contract?

Yes.

Can i claim the Input Tax Credit on the Goods*?

Yes, if you are GST registered.

Do i need a deposit?

No, if you qualify; a deposit is not required for a Chattel Mortgage.

*discuss any tax related issues with your tax advisor/accountant.