Why choose us?
Benefits of a Chattel Mortgage
A Finance Lease is an agreement whereby the financier owns the goods and you rent these goods from the financier. You must show the lease on your balance sheet as an asset with a corresponding liability. Finance Lease agreements must have a residual lump sum which represents the potential sale price of the goods at the end of the term lease.
A Novated Lease is the only equipment finance product where the asset does not need to be used for at least 51% business use.A Novated Lease agreement is where an employee leases a car and then sub-leases (novates) it to their employer who pays the lease rentals. The employer agrees to have these lease novated to them while the employee remains in their employment. The employee remains fully liable for the debt and failure of the employer to pay the rentals constitutes a default.
An Operating Lease is a pure rental agreement, with no documented residual (however, the financier may in fact take the risk of covering the residual). The goods can be returned to the financier when the agreement expires.As Operating Leases are usually written for terms significantly less than the useful life of the equipment, the financier should be in a position to sell at a profit or extend the lease at the same monthly repayment. The outstanding debt to the financier is reduced so the effective interest rate for the extended period is far higher than the original term. These extended lease rentals are referred to as “Inertia Rentals”.
Under an Asset Purchase agreement assets are technically hired until the last payment of the agreement is made, at which point the user receives full title and becomes the outright owner.Depending on business usage, the interest portion of the regular repayments and depreciation can be claimed as tax deductions.Chattel Mortgages are designed to allow clients using cash based accounting to claim back the full GST payment in their next BAS return.Please note that as the financiers have to register a charge on the asset, the turnaround times for chattel mortgages are greater than lease/asset purchase. The financiers must receive original paperwork before settlement.
Sterling Financial Group Pty Ltd can also provide a consumer car loan which is captured under Asset Finance Credit Guide.
Some items are regarded poorly as security such as boats, planes, office furniture and fittings etc. Contact our team at Sterling Financial Group to ascertain whether the goods you wish to finance are acceptable security.Similarly, some clients are regarded as a poor risk, such as owner-drivers with only one vehicle, those who have been previously declared bankrupt or have a poor credit history.
