When you need to purchase a new vehicle or a number of new vehicles for your business, there are various options you could explore in terms of financing. One that you might find suitable is chattel mortgage business finance; a commercial financial product where you take ownership of the vehicle – known as the chattel – or vehicles at the time you buy. It's a straightforward loan transaction, and for businesses it may be particularly attractive as there could be tax advantages.
When you buy a new vehicle for your business, and take ownership of your purchase, your lender will take out a mortgage over the chattel to secure the loan by registering an interest over the vehicle with the Personal Property Securities Register (PPSR). This means that if you fail to pay off the amount loaned in the time agreed, and are not making your regular monthly payments, the lender can repossess the vehicle. Once you have finished paying off the loan as per the contract, the lender removes the security interest, giving you clear title to the vehicle.
Using a chattel mortgage is a tried and tested way to afford a new vehicle for your business. It allows you to own the vehicle from the start of the loan period but instead of you having to pay out a large amount of capital, you can structure your cash flow to make it much easier to pay off. At the end of the agreement, your business then has another asset.
There are a number of benefits a business can get from taking out a chattel mortgage. These include:
This type of finance enables you to buy the vehicle you want quickly and at competitive rates, with the risk being that if you fail to repay the loan in the agreed period of time you are likely to lose the vehicle and, consequently, any money you have previously repaid.
^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.