A chattel mortgage works in a similar way to a secured loan – you borrow the money to buy the asset (ie a car) and then you use the asset (broom broom) as a guarantee. What sets it apart, however, is that it’s only for assets that are used for business.
Make sense? Not quite?
Ok, let’s say you’re a tradie and need a ute to carry your equipment and materials from site to site every day. Or maybe you operate one of those vans that drives around with green sleeves blaring from the speakers offering kids (and adults!) icecream… Those are examples of vehicles used to support a business and which may qualify for a chattel mortgage.
Before applying for a chattel mortgage, however, we do advise checking in with a trusted accountant to make sure it’s a suitable option for your business.