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Purchase Contracts

Two types of credit contracts commonly used to finance equipment purchases

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The two most common types of credit contracts are: 1) the conditional sales contract, in which the purchaser does not receive title to the equipment until it is fully paid for; and 2) the chattel mortgage contract, in which the equipment becomes the property of the purchaser on delivery, but the seller holds a mortgage claim against it until the amount specified in the contract is paid.

Excerpted from Starting a Home-based Business