The Top Reasons to Choose a Chattel Mortgage
When it comes time to finance a new piece of equipment for your business, a few different options are available. You could go with a traditional loan or choose a chattel mortgage. What is a chattel mortgage? Is a Chattel mortgage good option? This is a type of loan secured by personal property, such as equipment or vehicles. Here are the top reasons to choose a chattel mortgage:
They Have Minimal Capital Outlay
When you take out a chattel mortgage, you can often finance the entire cost of the equipment, so you won’t have to come up with a sizeable down payment. It can be a significant advantage if you don’t have a lot of extra cash on hand. Also, since the equipment is used as collateral, you may get a lower interest rate than you would with a traditional loan.
Chatter Mortgage Offer Tax Benefits
Another advantage of a chattel mortgage is that you may be able to deduct the interest payments from your taxes. This can help you save money and make it more affordable to finance new equipment. In addition, you may also be able to deduct the depreciation of the equipment, which can further reduce your tax bill.
They Have Flexible Repayments
Chattel mortgages also have flexible repayment terms, so you can choose a plan that fits your needs. For example, you may be able to make weekly or monthly payments, or you may be able to structure the loan around your equipment’s usage. This can help you save money and keep your cash flow strong.
Another advantage of a chattel mortgage is that it doesn’t affect your business’s balance sheet. This can be important if you’re trying to keep your debt-to-equity ratio low or if you’re trying to avoid taking on too much debt.
They Allow Balloon Payments
To keep your monthly payments low, you can choose a chattel mortgage with a balloon payment. You’ll make lower payments for a set period and then one large amount at the end of the loan term. This can be helpful if you need time to build up cash flow or expect your business to grow in the future.
As you can see, there are many reasons to choose a chattel mortgage. If you’re looking for a flexible and affordable way to finance new equipment, a chattel mortgage may be the right choice. Talk to your lender today to learn more about this type of loan and see if it’s right for your business.