Expand Your Business with Chattel Mortgage: An Explainer
For businesses across Australia, acquiring essential equipment is a key factor in growth and expansion. However, purchasing equipment outright can be a significant financial burden, particularly for small and medium-sized enterprises (SMEs). A Chattel Mortgage is a financing option that allows businesses to acquire necessary assets while maintaining cash flow. Here’s how it works and how it can help your business grow.
How Chattel Mortgage Helps Business Expansion
A Chattel Mortgage enables businesses to purchase equipment while spreading the cost over time. With this type of financing, businesses can:
- Take immediate ownership of the asset.
- Secure funding while using the equipment for operations.
- Benefit from potential tax advantages, such as GST claims and depreciation deductions.
- Improve financial flexibility by structuring repayments to suit cash flow.
How Chattel Mortgage Works
- Select the Equipment
- Identify the necessary machinery, vehicles, or technology for expansion.
- Work with a supplier to determine the total cost.
- Apply & Get Approved
- Submit a chattel mortgage application to a lender or finance broker.
- Lenders review business financials, credit history, and repayment capability.
- Once approved, funding is provided to acquire the equipment.
- Take Ownership of the Equipment
- Unlike leasing, the business owns the equipment from the start.
- The lender secures the loan against the equipment as collateral.
- Make Repayments Over Time
- Fixed or flexible repayment options based on business cash flow.
- Interest and depreciation may be tax-deductible.
- Complete the Loan & Own the Equipment Outright
- Once the final repayment is made, the lender’s security is removed.
- The business continues to use the equipment without further obligations.
Key Benefits of a Chattel Mortgage
- Immediate Ownership: The equipment belongs to your business from the beginning.
- Secured Loan: Lower interest rates as the loan is backed by the asset.
- Tax Advantages: GST on the purchase price can often be claimed upfront.
- Customised Repayments: Tailor payments to align with cash flow.
- Equity Growth: As repayments are made, the business gains full asset value.
What Can Be Financed with a Chattel Mortgage?
A wide range of business equipment can be financed, including:
- Vehicles: Trucks, vans, and company cars for logistics expansion.
- Machinery: Construction, manufacturing, and farming equipment.
- Technology: Computers, servers, and automation tools.
- Medical Equipment: Diagnostic machines and patient care tools.
- Office Fit-Outs: Furniture, security systems, and telecom setups.
- Hospitality & Retail Equipment: Commercial kitchens and POS systems.
How to Apply for a Chattel Mortgage
- Determine Business Needs: Identify what equipment is required for expansion.
- Compare Lenders: Evaluate interest rates, loan terms, and flexibility.
- Prepare Documentation: Provide financial statements, credit records, and business details.
- Submit an Application: Work with a finance broker for a smooth approval process.
- Review & Finalise Terms: Ensure the repayment structure aligns with business growth goals.
When to Consider a Chattel Mortgage
- If you want to own your equipment immediately while spreading payments.
- If you need equipment to increase production and efficiency.
- If you want to leverage tax benefits like GST claims and depreciation.
- If securing an asset-backed loan at lower interest rates is a priority.
Take Action – Secure Your Equipment with a Chattel Mortgage Today!
- Compare lenders to find the best financing options.
- Speak with a finance broker for tailored solutions.
- Apply today and take full ownership of your business equipment!
Grow Your Business with Smart Financing!
A Chattel Mortgage is a powerful way to expand operations without financial strain. Contact a trusted finance broker today to explore your options and secure funding for your business growth. Take control of your assets and drive success—invest in your future today!
The Team at The Accountants and The Finance Brokers are here to help you navigate your cash flow requirements in your business. We offer complimentary cash flow reviews and assist you in understanding your finance needs.
