Chattel mortgages - big benefits for small to medium businesses
A Team Leasing Chattel Mortgage facility can benefit those small to medium sized businesses that account for their business using the Cash Method. Like the other financing products, you have full use of the equipment during the term. You have the security of a predictable monthly payment, which can be lowered by including either a deposit or an end of term “balloon”. Unlike other products, however, you have ownership of the equipment from the beginning. It is simply a loan secured by a mortgage over the equipment.
A balloon is the amount that will need to be paid at the end of the term (much like a residual on a lease). Having a balloon put into your agreement lowers the payments which might better suit your cash flow and whether you have a balloon or not is entirely up to you. However, you may choose to pay the loan down to zero which means once the final payment is made there is nothing else to pay.
If you need a competitive Team Leasing chattel mortgage for your business, apply now or contact us online or call us on 1300 798 977 and learn how we can help your business grow.
Benefits of a Team Leasing chattel mortgage
Some of the big benefits of Team Leasing chattel mortgages include:
- Subject to credit approval, we will finance 100% of the purchase price
- Terms range from 1 year to 5 years
- Interest and depreciation is tax deductible if the asset is used for business
- The interest rate is fixed for the term
- No GST is charged on the payment
- Customers registered for GST can claim the GST that is included in the purchase price
- A balloon payment will lower your regular monthly payments. This not only improves your cash flow, but makes the equipment more affordable
Tax implications of a Team Leasing Chattel Mortgage
There are GST, interest and depreciation implications:
- The monthly repayment or balloon amount is not subject to GST
- Where the equipment is used for business use, you can claim “interest and depreciation”. That is, interest on the payments and depreciation
- GST is also claimable on the purchase price of the equipment in one amount