A loan secured by Specific Security Agreement is a type of lending facility used to finance business equipment. With a Specific Security Agreement, the customer owns the goods. The lender takes a fee over the goods as security.
Also known as a Chattel Mortgage, it works similarly to the traditional Commercial Hire Purchase (CHP) product. It has similar tax deductions and flexibility surrounding its terms and balloon payments. It has grown in popularity beyond the CHP due to a borrower's ability to claim back their full GST (input Tax Credit) upfront regardless of which tax system the business runs (cash basis or accrual basis).