Specific Security Agreement
Specific Security Agreement
A Specific Security Agreement, also known as a Chattel Mortgage Agreement works in similar fashion to the traditional Commercial Hire Purchase (CHP) product with similar tax deductions and flexibility surrounding its terms and balloon payments.
It has grown in popularity beyond the CHP due to a borrower’s ability to claim back their full GST (input Tax Credit) upfront regardless of which tax system the business runs (cash basis or accrual basis).
With a Specific Security Agreement the goods are owned by the customer and the lender takes a charge over the goods as security.
Key Benefits of a Specific Security Agreement
Ability to claim GST (Input Tax Credit) upfront on both cash & accrual basis
Up to 100% financing (including GST)
Full ownership of equipment at end of term
Flexible term and balloon payment options
Fixed Payments for ease of cash flow management.
Attractive tax deductions of interest expense & depreciation.