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Tax Benefits: Commercial Caravan Chattel Mortgage

While caravans are primarily associated with the holiday, recreation and private touring, the wide range of RV types and models are also used extensively for business and work applications. RVs can make exceptionally useful accommodation and office space for mining, resources and research teams operating in remote regions. Caravans can be used on construction sites in difficult to access locations for temporary and moveable workforce housing and office space. Specialist vans are also now being built and marketed to suit tradies on the go. Plus much other work and business-related applications.

We provide a range of finance options for businesses acquiring caravans for use in their operations. All business finance products are structured to include tax benefits to the business. The way in which the benefit is realised varies according to the loan type and possibly aspects of the business operation itself.

Of all the commercial finance products available through our extensive accreditations with banks and lenders, the Caravan Chattel Mortgage is the most widely used loan type for the purchase of RVs for business usage.

Caravan Chattel Mortgage: Caravan Loan Features

Chattel Mortgage is a versatile and commonly used form of commercial finance which is utilised for a wide range of business equipment across all industries. It is also referred to simply as an Equipment Loan by some banks and lenders. This loan type suits businesses that use the cash method of accounting, a very widely-used method across Australian businesses of all types and sizes.

The format is based on a secured loan structure where the asset, in this case, the caravan, is used as the security against the finance being extended. With the lender having this security, the borrowing business takes immediate ownership of the caravan and is responsible for all ongoing expenses including registration, insurance, maintenance, servicing and repairs.

Chattel Mortgage attracts the lowest interest rate across the range of equipment finance options, which can further enhance its appeal. Refer to our caravan finance interest rate comparison chart for our current rates on caravan Chattel Mortgages.

We arrange this type of finance at a fixed interest rate which remains in place at that low rate over the full fixed term of the finance. Those fixed elements deliver a fixed monthly repayment which we negotiate to work with the cash flow of our individual customers.

Chattel Mortgage includes an option for what is known as a balloon. This is a percentage of the loan amount borrowed which is set aside for payment in a lump sum at the end of the finance term. Individual lenders will have guidelines around the maximum percentage balloon they may allow. The larger the balloon the lower the monthly repayments but the greater the amount due at the end of the loan term. The smaller the balloon, the higher the monthly payments but a smaller amount is due at the end of the loan term.

A Chattel Mortgage balloon can be paid in full from a business’ funds, refinanced with a new loan or finalised if the caravan is traded in on a new vehicle. If the caravan is sold while under finance, all outstanding monies including the balloon will need to be finalised.

Business Tax Benefits For Your Caravan Finance

As a commercial or business finance product, Chattel Mortgage includes specific features as to how tax is treated and benefits are realised.

  • GST on the entire purchase price of the caravan can be claimed on the BAS following purchase, for business registered for GST.
  • GST is not charged on interest on any loans.
  • As the full GST pertaining to the purchase is claimed just after purchase, GST is not charged on the monthly repayments.
  • The repayments are not fully tax-deductible. Only the interest portion of the repayments is treated as a tax deduction.
  • The main tax deduction for Chattel Mortgage is realised by a business through depreciation of the caravan according to the rulings set by the ATO. Under normal rulings, this would be a percentage of the value of the asset each year over a scheduled time period.
  • A tax benefit can be realised with Chattel Mortgage for eligible businesses on eligible equipment through accelerated asset depreciation measures when applicable. These measures include temporary Full Expensing and Instant Asset Write-Off which are introduced at times by the Federal Government to stimulate investment and the economy.
  • Temporary full expensing is currently available on eligible assets and for eligible businesses on purchases made through to 30 June 2023. This measure allows for the full value/price of the equipment, eg caravan, to be deducted as a business expense in the year the caravan was acquired.

Businesses are highly recommended to refer to their accountant on the selection of finance product to ensure it meets their individual financial objectives and business set-up.

Business Caravan Loan Buyers

Caravan Chattel Mortgage is versatile and suits many types of business setups. These include owner-operators, sole traders, SMEs, small businesses, large corporations and family enterprises. Jade Caravan Finance can source Chattel Mortgage quotes for new businesses just starting up with our Low Doc and No Doc Caravan Loans service.

Suitable Caravan Loan Types

All types of new RVs can be acquired with Chattel Mortgage, subject to individual lender guidelines. These include traditional caravans, camper trailers, specialist tradie caravans, off-road and hybrid models, toy hauliers, mobile homes and others.

For a quote on Caravan Chattel Mortgage for your business, contact one of our consultants or head to our finance calculator to work up estimates to assist your purchase decisions.

Contact 1300 000 003 for a cheap Caravan Chattel Mortgage quote

DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.

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