Chattel Mortgage
A Chattel Mortgage is a common finance product looked at by business’. It is similar in nature to a secured loan as the buyer takes ownership of the truck or trailer at the beginning of the purchase.
As the truck or trailer is ‘owned’ by your business, the bank or lender will hold a security over the asset (similar to a home loan or car loan) until the loan has been completed. This provides comfort to the lender especially with higher loan amounts.
Chattel Mortgage
Loan Terms
Chattel Mortgage
Have a question?
We’ve included answers to the most common questions on chattel mortgage loans below.
Chattel Mortgages loan terms vary from 1 to a maximum of 7 years. There is also the benefit of having a balloon / residual payment at the end of the loan term. The loan term is determined on your budget and repayment comfort.
As Chattel Mortgage loans are secured against the truck or trailer, they usually offer lower interest rates than unsecured business loans. With many commercial lenders offering interest rates below 5% and loan terms up to 7 years, this allows ABN holders to purchase newer assets as stay within their budget. Interest rates are determined upon each application and take into consideration the age of the truck or trailer, the loan amount, your credit rating / score and overall application.
Whether you’re buying through a private sale, auction, social media or online marketplace, an chattel mortgage is a suitable product, especially if purchasing older model trucks and trailers. Some lenders may require a mechanical or visual inspection to verify the make and model and will provide a PPSR (personal property security register) Report to verify whether there the truck or trailer is encumbered to another financier, stolen or a repairable write off.
Traditionally truck finance is offered as a Chattel Mortgage or Leasing contract, however Unsecured Business Finance is also available to allow for purchases of trucks and trailers to assist in your business.
Chattel Mortgage loan options are offered either as a Full Doc (Tax Returns) or Lite Doc (No Financials) however remember, the more information you can provide, the better result you can get. Although you can secure a chattel mortgage loan with very little financial information, providing up to date Tax Returns, BAS or Bank Statements can offer a wider range of lenders to choose from.
No deposit is usually required for a chattel mortgage and as long as you work around your budget, you can borrow for extras if needed such as loan protection cover, truck warranty or insurance.
Adding a deposit however will reduce the loan amount required, monthly repayments and total interest payable.
As long as we have the correct information including income, you could have an answer the same day.
Yes, there may be taxation benefits with financing through a Chattel Mortgage.
Some benefits include:
- Goods and Service Tax (GST) – You could claim the GST credit when purchasing a truck for commercial use.
- Interest Repayments – You could claim the annual interest paid on your Chattel Mortgage as a deduction in your tax return.
- Depreciation – Every year you have the truck or trailer the value depreciates. You could claim the depreciation as a tax deduction.
You should consult your tax professional regarding Chattel Mortgage benefits.
WHAT CUSTOMERS SAY ABOUT US
Chattel Mortgage Finance is available throughout the Gold Coast, Burleigh Waters, Robina, Southport, Nerang, Upper Coomera, Varsity Lakes, Brisbane, Logan, Springwood, Northlakes and Ipswich, Toowoomba