Chattel Mortgage | Inventory Financing | Short Term Financing | Finance
A chattel mortgage is a method of obtaining funds by pledging specifically identified personal properties or inventories. Under the chattel mortgage method, inventories are identified by serial number or by some specific character. Those pledged inventories are owned and hold by the borrower but the lender has full control over them.
Inventories cannot be sold without the consent of the lender. Firms with rapid turnover may face the problem of identification of that particular inventory. So, chattel mortgages are well suited for certain finished goods inventories of capital goods such as machine tools.