The specific security agreement is similar to a mortgage in which the financed equipment belongs to your company, but which is mortgaged by a registration fee on the equipment at BOQ Equipment Finance Limited. A lender has conditional ownership of the property as part of a mortgage. This is different from a traditional mortgage in which the credit is secured by a right of pledge of immovable property. Companies often use chattel mortgages to buy new equipment. Heavy machinery has a long service life and its purchase can be financed by the seller for a certain period of time, but the seller will want to maintain a safety interest in the machine in the event of a breakdown. A mortgage allows the buyer to use the equipment while maintaining a safe position for the seller. The seller can recover and sell the equipment to compensate for credit losses in case of delay by the buyer. A chattel mortgage differs from a traditional mortgage in that the lender can take possession of the property that serves as collateral in the event of a delay in a traditional loan. The legal relationship is reversed by a mortgage.
The lender does not hold any right of pledge on the movable property – the property. Instead, ownership of the business returns to him under certain conditions until the loan is satisfied. The borrower regains full control and ownership of the cat at that time. An equipment financing option in which you own the asset If you remove a revolving limit, you have an approved credit limit for financing the equipment over a fixed period of time. .