Breakthru Home Loans can help you secure asset finance with competitive interest rates and helpful features.
Our expert mortgage broker team can help you with personal loans, car loans, a variety of leases, commercial leasing options, chattel mortgages and more.
Just as a home loan is a loan used to buy a home, asset finance is a finance arrangement that businesses use to secure an asset.
Sometimes, the asset finance may be used to fund a regular purchase (perhaps through a chattel mortgage arrangement). At other times, the asset finance may be used for a hire purchase or leasing arrangement.
A chattel mortgage is like a property mortgage, but for a business vehicle (an arrangement that’s also known as a chattel mortgage car loan) or an item of business equipment (e.g. machinery). As with a property mortgage, the borrower acquires the asset outright and the asset is secured against the loan. Once the loan is repaid, the mortgage is removed.
A hire purchase is similar to a chattel mortgage, in that the borrower puts down a deposit, makes monthly payments and gets to use the asset. But there’s one key difference – the asset is owned by the lender until the final payment is made.
The downside to asset finance is obvious – you have to pay for the privilege. Another disadvantage is that if you fail to keep up with your payments, you might be forced to surrender the asset.
But asset finance also has some very attractive potential benefits:
Ideally, the costs of the asset finance would be less than the profits generated by the asset, which would make the asset finance arrangement a money-generating exercise
It’s generally easier to qualify for asset finance or a chattel mortgage than a traditional business loan
Unlike with a traditional business loan, asset finance is secured against the asset itself, rather than the business’s or owner’s property.
Securing an asset with asset finance has a lower upfront cost than buying it with cash.
Asset finance is used by businesses throughout Australia, ranging from microbusinesses to big businesses, in a range of industries.
The key thing is not the size of the business or its industry, but the creditworthiness of the business and the asset it wants to secure.
As part of the asset finance application process, your business will need to provide financials and information about the asset you’d like to secure.
Many businesses have had great success using asset finance and chattel mortgages – but they’re not suitable for everyone.
If you’re unsure whether asset finance and chattel mortgage car loans are suitable for your business or how they would work, an expert mortgage broker, like Breakthru Home Loans, will be happy to explain the details and model different scenarios for you.
You can then make an informed decision about whether asset finance and chattel mortgages are right for you.
Potentially interested in asset finance or a chattel mortgage car loan? Contact Breakthru Home Loans today to discuss your options.