Jade Equipment Finance offers Chattel Mortgage facilities as a flexible and workable commercial loan solution for businesses of all sizes to purchase or refinance equipment.
The lender provides financing to the business to purchase the equipment, referred to as the ‘chattel’, and holds a ‘mortgage’ over that equipment until the loan is finalised. The security interest is registered by the lender with the Personal Property Security Register until the loan is finalised.
The business/borrower, takes ownership of the equipment once the purchase is made and loan agreement signed and makes monthly repayments.
Chattel Mortgage Key Features
- All Chattel Mortgages feature the Jade trademark best interest rates.
- Extremely suited to businesses that implement a cash accounting system.
- Fixed equipment finance interest rates for the duration of the loan
- Fixed monthly repayments for the term of the loan. Your Jade Equipment Finance consultant will work with you to negotiate the best option for your cash flow, normally from 24 months/2 years through to 5 years or 60 months.
- No deposit is required by the lender, however, paying a deposit will reduce the overall loan amount and hence lower the monthly repayments.
- A fixed balloon amount is payable when all monthly repayments are finalised. This is set in discussions between yourself and your Jade consultant and can be either a percentage of the total purchase price of the equipment or a fixed dollar value. Note you can choose not to have a balloon.
- The larger the residual, the lower the monthly repayments. The value of the equipment at the time the residual will be due, ie in 4-5 years, should be taken into consideration.
- The residual is established when the loan agreement is negotiated and is fixed.
- The monthly repayments are usually fully tax deductible as a business expense.
- The total amount of GST on the equipment price may be claimed on the ensuing Business Activity Statement.
- Depreciation on the equipment is accounted as a tax deduction at end of financial year.
- On paying the final monthly repayment, the residual is to be paid to finalise the loan.
- Residual may be re-financed.
Finalising a Chattel Mortgage
- When you have paid the final monthly repayment, if you have elected to include a balloon in your loan structure, then it is due to be paid.
- When the balloon has been paid, the lender releases the ‘mortgage’ and security interest as registered with PPSR.
- To conserve cash flow, the residual may be re-financed through Jade Equipment Finance via another Chattel Mortgage, equipmenmt lease financing, Commercial Hire Purchase or unsecured business loan.
Your Jade Equipment Finance Consultant is readily available to explain equipment Chattel Mortgage for you. However, we advise all clients to consult with their own accountant or financial advisor for specific direction in regard to your business.
Chattel Mortgage is available for equipment purchases across a wide range of industries, for businesses of all sizes.
Speak with a Jade Equipment Finance Consultant to discuss a Chattel Mortgage for your proposed equipment purchase. Call 1300 000 003