Specific Security Agreement (Chattel Mortgage)

A Specific Security Agreement (formerly Chattel Mortgage) facility can benefit those small to medium sized businesses that account for their business using the Cash Method.

Like the other financing products, you have full use of the equipment during the term. You have the security of a predictable monthly payment, which can be lowered by including either a deposit or an end of term “balloon / Residual”. Unlike other products, however, you have ownership of the equipment from the beginning. It is simply a loan secured by a mortgage over the equipment.

A balloon is the amount that will need to be paid at the end of the term (much like a residual on a lease). Having a balloon put into your agreement lowers the payments which might better suit your cash flow and whether you have a balloon or not is entirely up to you. However, you may choose to pay the loan down to zero which means once the final payment is made there is nothing else to pay.

Features:

•    Subject to credit approval, finance 100% of the purchase price
•    The equipment being finance is all the security required in most cases
•    Standard Terms range from 3 year to 5 years but can be varied to up to 7 yrs
•    The interest rate is fixed for the term
•    Balloon / Residual payments are accepted
•    Repayment can be structured to by Quarterly, Bi-Annually or Yearly
•    No GST is charged on the payment

Benefits:

•    Interest and depreciation is tax deductible if the asset is used for business
•    Customers can claim the GST in their next BAS period
•    A balloon payment will lower your regular monthly payments.

If you need a competitive Specific Security Agreement (formerly Chattel Mortgage) for your business, apply now or contact us online or call us on 02 9453 0300 and learn how we can help your business grow.

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