COMMERCIAL HIRE PURCHASE
( CHP ) CHATEL MORTAGE
CHP or chattel mortgage finance allows the
purchase of an asset over a set term. The
customer owns the asset at the end of the
financing term. You can claim depreciation,
as if you were making an outright purchase,
and GST is reclaimable on the capital cost
in the period the equipment is paid for (check
with your accountant, as there are differences
between cash and accrual based GST payers).
FEATURES
BENEFITS
Ownership at end of finance
agreement term
GST on equipment
cost is paid in full at outset
Equipment
shows as an asset on the balance sheet
and the amount owed as a liability
· There
is a choice of using fixed or variable
rates
Minimum initial outlay preserves the
working capital and increases cash flow
Nominal annual extension rentals
Customer retains the majority of the
sale proceeds
