A chattel mortgage is a sought-after option for business owners when considering car and equipment finance solutions. A chattel mortgage has a similar structure to a fixed-rate car loan. Your provider puts the security on the equipment you have purchased, making your asset purchase collateral for the loan. A great step if you do not want to risk other parts of your private or business assets. A financing option like this gives you ownership right away and you then pay off the amount from the income the asset generates in your business. This is an ideal solution as it ensures you can operate your business, without the concerns of your personal assets being at risk by success or failure. Read on to find out more about these solutions.
The Benefits
When dealing with Credit Concierge there are a number of benefits you can utilize, the most notable of which is the help and the support, from your expert finance broker. They can usually structure your loan repayments over 2 to 5 year terms that will be explained to you by your finance professionals. Interest rates are usually lower than unsecured debt and can be fixed or variable depending on the details and repayment times. These can also be fixed at the same amount each month or can be seasonally structured to fit your cash flow requirements, giving you the ability to responsibly pay back the finances over time.
Balloon Payment Explained
A balloon payment or residual amount is an amount that’s not paid off until the end of your agreement, rather than at small increments along the way. The higher the balloon payment, the lower your monthly repayments are, and the larger the end payment will be. Keep in mind that higher balloon payments will increase the amount of interest you pay over the loan period, as you won’t be paying down the principal as quickly or as consistently. You might choose to have a balloon payment if you prefer to keep repayments lower for cash-flow purposes.
Tax Implications
With a chattel mortgage for financing, the purchase price of the car or equipment is financed and you could be entitled to claim an input tax credit up-front. You may also be able to claim interest and depreciation costs, depending on how much you use your equipment for business use.
When taking on a chattel mortgage car loan you can finance 100% of your equipment needs. This gives you the chance to start making money through your business before you are required to start making your repayments. Contact us today to find out more about these services!