Chattel Mortgage
Chattel Mortgage as a finance option can be used by Sole Proprietors, Partnerships and companies that use the ‘cash’ method of accounting relating to the Goods and Services Tax (GST)
The GST component of the Asset being purchased can be claimed on the next Business Activity Statement, instead of claiming the GST over the term of the finance contract.
Options:
You can select to finance the full purchase price or use a deposit or a trade in to reduce the amount financed, which reduces your repayments. You could even apply your GST refund to pay off your loan earlier and to save interest paid over the term of the loan.
Tax Claims:
When purchasing with Chattel Mortgage, you become the owner of the asset and the financier takes a mortgage over that asset. You being the owner may claim a tax deduction for the depreciation of the asset and also claim the interest component of the loan repayments when the asset is used for business use. GST is not calculated on the loan repayments.
(Refer to your tax accountant for all confirmation of current tax claims available).
BENEFITS:
- Fixed interest rates
- Loan repayments are fixed over the loan term
- Term of the loan can range from 12 to 60 months
- Deposit may be used
- Finance is secured against the asset, allowing for lower interest rates
- You may have a Balloon payment at the end of the term of the loan, this can help to tailor your loan repayments to suit your budget
- Tax deduction when the asset is used for business use
- GST on the purchase price component can be claimed as an Input Tax Credit on the next Business Activity Statement
- No GST on the monthly repayments