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ASSET FINANCE
Options to fund your asset purchases
CHATTEL MORTGAGE
A chattel mortgage is the same product as a secured car loan only for assets that are purchased primarily for business use. Much like a secured car loan, the lender will provide the funds for you to purchase the vehicle and you’ll take ownership at the time of purchase. The lender takes a ‘mortgage’ over the vehicle as security for the loan. Once the contract is completed you’ll own the vehicle outright. In most cases the consumer will have an agreed residual (balloon) payment you can either pay out as a lump sum, refinance or sell the asset to cover the remaining debt.
COMMERCIAL HIRE PURCHASE
A commercial hire purchase is a common type of fixed rate car loan for business. The financial lender will agree to purchase the GST inclusive amount for the vehicle which will be lent back to the customer over a pre-determined length of time. During the loan term of the CHP, the customer will have use of the vehicle without being the legal owner. Once all repayments have been made and the debt clears, the customer will then take ownership of the vehicle. If there is a balloon payment, the customer will then have the option the payoff the balloon, refinance or sell the vehicle.
