Business loans, equipment finance, debtors, commercial properties, a lease, or any other business finance – we provide the whole service.
As an alternative to leasing or hire purchase, a chattel mortgage or bill of sales arrangement is a fixed interest rate loan with security provided by a mortgage over the relevant equipment i.e. vehicle, boat etc. This is a particularly favourable solution for those businesses that wish to retain the equipment at the end of the term and account for GST on a cash basis. A chattel mortgage, unlike a lease or hire purchase agreement, gives you immediate ownership of the asset from the beginning of the loan. The contract or repayments do not attract GST or stamp duty.
Rates can be in the 5%’s for the right applicant and security.
Residual/Balloon: You can choose to have a balloon payment as the last payment of your finance agreement, but it can also be the first month’s payment. This balloon payment is between 10% – 40% of the cost price. A balloon payment allows for lower monthly payments and leaves you with more working capital to run your business.
Accounting Benefits: You can elect to pay the GST portion of the invoice price from working capital or fund it as part of the loan amount (the loan can be structured so that when the income tax credit is received, from your next BAS lodgement, it is paid off the loan to reduce the debt). The interest components of all repayments are fully tax deductible, provided goods are used 100% for business purposes. The depreciation on the goods is also completely tax deductible.
Term: The term of the finance agreement can be from 1 to 7 years.