Secured Loan Agreement ( Chattel Mortgage )
A Secured Loan Agreement can be beneficial to small and medium sized businesses who account for their GST on a cash basis.
- Full Use, at a Known Cost
Like other equipment finance facilities, you have full use of the equipment during the term. You’ll have the security of a predictable monthly payment, which can be lowered by adjusting either the initial deposit or the end of term ‘balloon’. Unlike other facilities, however, you take ownership of the equipment from the outset. Classic Funding Group takes security over the equipment (similar to arranging a mortgage on a home).
- Tax Effective Asset Management
One of the main benefits of a Secured Loan Agreement is the ability for those who account for their GST on a Cash basis to claim back the GST on the cost price on their next Business Activity Statement. While the equipment does appear on your Balance Sheet, any interest paid plus depreciation of the equipment may be tax deductible with business use. Because payments are calculated on the GST inclusive price, Secured Loan Agreement payments attract no GST.*
- End of Term Options
Once all of the payments for the Secured Loan Agreement have been paid, our security interest in the equipment is released. You do not usually have the option of handing the equipment back as you do with a Lease or Rental.
At Classic Funding Group, our expert staff will work with you to build a solution to help you get the equipment you need to grow your business. We tailor each equipment finance solution specifically to the needs and capacities of each client. Contact us on 1300 780 895 to discuss your equipment and the finance solution that best suits you.
*We do not provide financial advice. You should obtain your own financial advice on the tax and accounting treatment of any finance solution you choose.