How chattel mortgages work?
A chattel mortgage or secured loan provides ownership of the asset for the purchasing business from the outset. The entity providing the chattel mortgage will have a security interest in the equipment. (Only available in Australia)
When to use chattel mortgages?
A chattel mortgage is commonly used to:
- own the asset and avoid a balloon or residual payment;
- smooth cash flow by agreeing to set payments over a specified period.