Chattel Mortgage
A chattel mortgage is commonly used to finance eligible business vehicles and equipment.
The business generally owns the asset from the outset, while the lender takes security over the financed asset.
The right equipment can help a business move forward. The finance shouldn't hold it back.
Vehicles. Machinery. Equipment. Technology.
The assets a business relies on can be essential to how it operates and grows.
Asset finance may provide a way to fund eligible business assets without paying the full purchase price upfront.
But the loan amount is only one part of the decision.
The asset. Its expected useful life. Business cash flow. Loan term. Repayment structure. And any balloon or residual amount should also be understood.
At Evermore, we'll help you assess the finance options around the asset and explain how the proposed structure works.
What are you buying? How will the asset be used? Is it new or used? The asset type, age and intended use can influence lender appetite and finance options.
We'll consider the business, finance purpose and available financial information. Different lenders may have different documentation requirements depending on the transaction.
The lowest monthly repayment is not automatically the best structure. We'll consider the proposed loan term and any balloon or residual amount so you understand the repayment position and future obligation.
We'll research suitable asset finance options and explain the proposed lender, structure and key costs.
Once you're ready to proceed, we'll coordinate the finance application and work through the lender's requirements to settlement.
A chattel mortgage is commonly used to finance eligible business vehicles and equipment.
The business generally owns the asset from the outset, while the lender takes security over the financed asset.
Under a commercial hire purchase arrangement, the financier purchases the asset and the customer hires it for an agreed period.
Ownership generally transfers after the required payments and contractual obligations are completed.
Under a finance lease, the financier generally owns the asset and leases it to the business for an agreed term.
End-of-term options depend on the lease and financier.
A balloon is a lump sum amount remaining at the end of the loan term.
Because part of the loan balance is deferred, the regular repayments may be lower than a comparable loan with no balloon, all else being equal.
A balloon may be considered as part of a cash flow strategy or where the finance term is being aligned with the expected use or replacement cycle of an asset.
It also creates a future financial obligation.
We believe the question is not simply, 'How low can we make the monthly repayment?'
The better question is, 'Do we understand the total structure and the amount due at the end?'