Business Car Loan Options
Types of Business Car Loans
Chattel mortgage and commercial hire purchase agreements are the most popular and there is also a consumer leaase. With a commercial hire purchase or CHP, the financier buys the cars and loans it to the consumer for an agreed upon time. Monthly payments are made during the loan period and after payment, the vehicle is transferred to the borrower. The repayment period and interest rates are fixed, which makes it easy to make a loan that suits each businesses’ budget the best. There is no GST on repayments with this type of loan.
A chattel mortgage is a loan where the financier advances money to buy the vehicle. They will hold the mortgage over the car, which is used as security. Borrowers can finance the total purchase price or make a deposit or even use it as a trade-in. A residual payment or balloon payment is placed at the end of the term. The benefit to this type of business car loan is that the driver takes ownership at the time of purchase unlike CHP. There are also fixed repayment amounts and flexible contract terms. Interest is charged with this loan and depreciation, which are both tax deductible for businesses. Most of these types of loans are offered by major lenders for self employed car loan and self employed car finance applicants.
Whatever the case, it isn’t hard to obtain a business car loan for the self-employed and the experience doesn’t have to be a daunting one. With the proper research and documentation, finding sole trade car loans is simple. Good luck in your pursuit for business car loans!