What is a Chattel Mortgage?
A Chattel Mortgage is a commercial finance product designed for businesses seeking ownership of a vehicle or asset. It enables you to take ownership of the chattel (vehicle or asset) at the time of purchase through the advancement of funds. Summit Fleet executes a ‘mortgage’ to you over the vehicle, providing security until the loan is fully repaid, including any balloon payment if applicable.
Benefits of Chattel Mortgage
Ownership from the Start
With Chattel Mortgage, you immediately become the owner of the vehicle or asset, gaining control and the associated benefits right from the beginning. This allows you to make operational decisions, customise the asset to suit your business requirements, and potentially access higher levels of financing.
Potential Tax Deductions
Businesses that use the vehicle or asset for business purposes may be eligible for tax deductions. The interest charges and depreciation expenses associated with the Chattel Mortgage can be claimed as business expenses, potentially reducing your overall tax liability. It is essential to consult with your accountant or financial advisor to understand the specific tax benefits applicable to your business.
GST Benefits
With a Chattel Mortgage, if your business is registered for Goods and Services Tax (GST), you may claim an Input Tax Credit for the GST included in the purchase price of the vehicle or asset on your next Business Activity Statement (BAS). This helps you manage cash flow and potentially offset the upfront GST payment against future GST obligations.
Balloon Payment Flexibility
Depending on the vehicle type and financial arrangements, a Chattel Mortgage may include a balloon payment option. This allows you to reduce monthly repayment amounts by deferring a portion of the loan to the end of the contract. You have the flexibility to structure the balloon payment according to your business needs and financial capabilities.
Summit Fleet Support
As your partner in Chattel Mortgage, Summit Fleet offers fully maintained and management-inclusive variations to the finance package (subject to suitability). Our comprehensive services cover maintenance, repairs, registration, and other fleet management aspects, ensuring that your vehicles or assets remain in optimal condition throughout the term of the mortgage.
