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Chattel Mortgage
With a Chattel Mortgage the customer owns the asset from the start of the agreement. The Financer secures the loan by registering a charge over the asset.
Benefits to Business
- Preserve your working capital - immediate access to vehicles and equipment without paying for them upfront
- No deposit - 100% finance is available to approved customers
- Easier cash flow management - payments terms can be matched to the customer's income
- Won't tie up existing assets - the item being purchased is normally sufficient security for the finance
- Tax benefits - interest and depreciation are potentially deductible
- Balloon payments (a lump sum payment at the end of a contract that settles the debt) can be arranged where customers can pay lower instalments during the term of the contract, then pay a balloon payment at the end of the term.
- There are no ongoing monthly fees or charges
- The customer owns the asset from the start of the agreement
At a glance
| Purpose |
Finance for companies and business professionals who need motor vehicles, trucks, earth moving, agricultural, industrial plant or professional equipment. |
| Payments |
Fixed for the life of the agreement |
| Term |
1-5 years |
| Age of asset |
Motor vehicles - up to 10 years at expiry of facility. Other equipment - age limit based on type of goods and intended use. |
| Minimum |
$10,000.00 |
| Payment frequency |
Monthly, quarterly, semi-annually, annually, seasonally or irregularly |
| Payment methods |
Direct debit from a bank account, BPAY or cash/cheque deposits via a cash booklet |
| Deposit |
Optional |
| Insurance, Fees and Charges can be financed |
Yes |
| Balloon/ Residual Payment |
Optional |
Taxation
National Capital Finance can give no effective guidance on Tax benefits and National Capital Finance staff must be careful to avoid any suggestion that they or National Capital Finance have given any tax advice. We can state that the customer 'may be able to claim certain tax benefits depending on their circumstances' however they should seek advice from their tax advisor.
GST
- GST is payable only on the initial asset purchase and can be included in the amount financed.
- If the customer holds an ABN and is registered for GST they may be able to claim GST upfront.
- Customers may elect to pay their initial GST rebate to their loan as an irregular payment.
- No GST is payable on the repayments, balloon payment or term charges
Government Duties
- Stamp duty: Duty is paid upfront as a lump sum. The Financer collects and pays the govenment on behalf of the customer.
- Stamp duty is calculated as a percentage of the total amount financed.
- Exemptions: VIC, NSW, ACT: An individual, partnership of individuals or sole trader (not an incorporated body) acquiring farm equipment or a commercial vehicle.
- NSW, ACT: Individuals and corporations hiring aircrafts, ships vessel hires or part thereof.
- No Stamp Duty applies.
Policies
- Existing charges over assets
- All other previous charges on the asset have to be released; the customer may need to deal with their bank that has the current charges over the asset. If a fixed and floating charge has been granted over the company we need to obtain a partial release from that charge on the goods we are taking as security.
- Finance is for business-related assets only.
- Asset finance for equipment must be no older than 5 years from the data of finance, except for passenger and commercial motor vehicles, which must not be older than 10 years at the end of term.
- Age of other assets dependent on type of goods and intended use
- Cannot be used for software
- Can be used for private sale
- National Capital Finance requires a declaration of purpose form signed when the customer entity is not a corporation. NB: Recent AFC notice advises that financiers need to take care in accepting customers' signed declarations that goods are for business purposes when other enquiries may lead to a conclusion that the use is non-commercial.
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