Asset Based Lending ‘Chattel Mortgage’ Commercial Loan
A Chattel mortgage is a legal term used to describe asset based lending or a loan arrangement in which an identifiable and move-able asset is used as security for the loan. This differs from a conventional mortgage in which the loan is secured by a lien on real property. This facility is usually used when there are multiple lower ‘value’ assets being funded.
Key benefits for your customer
- Flexible funding structures
- Asset value does not need to match the size of the loan
- Tax deductions may be available
A Chattel Mortgage is typically used when the equipment being purchased is not suitable for a Hire Purchase or a Lease agreement.
Examples include plant and machinery plus equipment which qualifies for a reduced rate of VAT such as a biomass boiler.