Chattel Mortgage

A way of financing a vehicle or piece of equipment where the business owns the asset from day one and the lender registers a security interest over it on the PPSR until the loan is repaid. Because the business is the owner, it can generally claim depreciation and the interest portion of repayments, and a business registered for GST on an accruals basis can usually claim the GST credit on the purchase price upfront. Structures often include a balloon or residual payment at the end of the term to lower monthly repayments.