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Komatsu PC138US excavator
‚ÄčChattel Mortgage (the term "Chattel" is a legal reference to "goods" ) can be used to finance up to 100% of the equipment  value (excluding GST).

The borrower can utilise any surplus cash as equity in the equipment. This will reduce the amount financed by Komatsu Corporate Finance (the Lender) and  reduce repayments.
Under a Chattel Mortgage contract the Borrower is the legal owner of the equipment. Komatsu Corporate Finance has a loan secured against the specific item of equipment being financed. The loan is secured by a registered mortgage (charge) over the equipment, with Komatsu Corporate Finance noted as mortgagee/charge, and the Borrower noted as mortgagor/chargor.
Frequently asked questions about the accounting and taxation treatment of a Chattel Mortgage contract

Q:           Is it on or off the borrower's balance sheet?
A:           On the balance sheet

Q:           What portion of the instalments are expensed for Australian Accounting Standard purposes?
A:           The interest component of each instalment is expensed.

Q:           What proportion of the instalment is tax deductible?
A:           The interest component of each instalment will generally be tax deductible. However, the
               Borrower can also claim depreciation deductions on the equipment.

Q:           Are up front deposits allowable?
A:           Yes.

Q:           Must there be a residual value?
A:           No. Generally, chattel mortgages would amortize to zero, but a bullet payment might be
               structured as the last payment.

Q:           When is Goods & Services Tax payable?
A:           The Borrower must pay all the GST upfront to the equipment supplier.
               At the discretion of the Lender, the Lender may or may not finance the GST portion.

The accounting and taxation treatment of financial products is subject to change. We strongly recommend that you seek independent advice from your taxation and accounting adviser. Please refer to the Terms and Conditions of Use of this Web Site.