The Chattel Mortgage also known as Goods Mortgage has gained substantial popularity with small to medium businesses since the implementation of the GST. A Chattel Mortgage is similar to a regular mortgage; you own and use the equipment with a mortgage over the goods until the loan is repaid. For those businesses registered for GST that are on a cash basis accounting you should be able to claim the entire up front GST on the transaction as an Imputation Taxation Credit (ITC) in the next BAS submission. To ensure eligibility confirmation should be sought from your accountant or financial advisor.

Key Features

  • Up to 100% financing (Including GST)
  • Business registered for GST can claim 100% of the Input Tax Credit in the Business Activity Statement (BAS) following purchase
  • Full Ownership of equipment – the equipment is the security
  • Payments may be structured – including irregular or seasonal payments
  • Finance term up to 5 years
  • Payments and Interest fixed for the life of the transaction
  • Available for new or used equipment
  • Equity in the equipment increases with each payment
  • GST not applicable on monthly instalments or final balloon
  • Balloon payment at end of term may be structured to lower monthly repayments

Key Benefits

  • Preserves working capital
  • The GST refund may be used to increase working capital, reduce the amount of the loan or offset your current GST liability
  • Builds equity in the equipment and your business
  • Fixed payments means cash flow is easy to manage
  • Interest and Depreciation are tax deductible
    To ensure suitability of this type of finance, confirmation should be sought from your accountant or financial advisor
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