Truck loans… all you need to know.

Share:

In the business world, there is a saying that “time is money”. And it especially applies to the transportation business. So our team have put together some handy hints and tips to prepare your business for its next truck or trailer purchase. If you are upgrading your new truck or adding to your existing fleet, the process needs to be quick, smooth and professional.

Be Prepared

If you are thinking about a new purchase it is important to prepare early. Discuss it with your lender or broker as early as possible so they can get to work on finding you the best possible product. We would also suggest getting a pre-approval in place, as this will allow the Lender to assess your application prior to purchase. This has two benefits. Firstly, it significantly reduces the time to approval when you do purchase and secondly, provides you with the peace of mind the loan is going to be approved.

Who is purchasing the Asset?

It is important to determine who is purchasing the truck. Is it you individually, or a Partnership, Company or Trust structure?

Your business should have an ABN if you are a trading entity, and you may need to be GST registered if you are turning over more than $ 75,000.00 pa (discuss with your tax adviser). The entity purchasing the asset is responsible for the loan repayment. And in mostly all cases, Directors Guarantees will be required if applying under a Company or Company Trustee.

Are you a Start-up Business?

If you are new business starting up and have recently secured a contract, then a pre-approval and early discussion with your Broker or Lender is important. It is likely a copy of your work contract and a cash flow forecast will be required; however your broker will guide you through this.

At yesapproved.com.au we work with our clients, get to understand the business model and guide them through the purchase/finance process. A good broker should do this and be available to you after the loan has settled to answer any concerns you may have.

Low Doc and No Doc options

For more established businesses, a Low Doc or No Doc option may be a great alternative to providing the financial statements for the business. If your accountant has not yet prepared your most recent tax returns and financial statements, these may help you get the loan sooner.
A Low Doc loan is a self-declaration of your income, and limited verification is required. The lender may use alternative forms of verification such as bank statements and/or BAS statements.
A No Doc loan requires no verification of income and the lender base’s their assessment on the business profile and the asset being used as security.

What type of Loan?

The most popular business loan is a Chattel Mortgage. The Lender uses the truck you purchase as security for the loan, and when the loan is paid out the security is released. Ownership of the asset remains with the business, and you can choose loan terms up to 7 years. Other loan types are lease and rent-to-buy, although these are less commonly used facilities. Your accountant or tax adviser will recommend the right loan for your business, and this needs to be conveyed to your Banker or Broker.

Prepare the paperwork

Your Broker or Lender will request the necessary paperwork to begin the finance process. Information such as work contracts, cash flows and financial statements may be necessary; so gather this altogether as soon as possible iso they can move quickly on your application. Providing the correct information and quickly can help the broker expedite the process with the Lender.

Choose the right team

The Broker or Lender will prepare a submission to the Credit teams and the more information they have, the better. Part of a finance broker’s role is to convey your business model, to a Credit Officer who will then interpret that, get comfortable with it and (hopefully) approve it. Therefore it is important for your Broker or Lender to get to know your business. They will work with you and be part of your team of experts, to help you grow your business and provide the professional advice when required.

The team at yesapproved.com.au are available to answer any questions you may have about your truck finance. We specialise in helping small to medium businesses get on the road.

Disclaimer: The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

Any advice contained in this document has been prepared without taking into account your particular objectives, financial situation or needs. For that reason, before acting on the advice, you should consider the appropriateness of the advice having regard to your own objectives, financial situation and needs.. For more personalised lending advice please contact our team online or on 08 9304 2010.

More Posts

Do Business loans, mean Higher rates?

You may have realised on your search for a business loan, that the costs vary significantly between lenders. The interest rates, upfront fees and ongoing fees do vary, as lenders price their products based onyour businesses risk profile. What is a risk profile? A risk profile is an assignment made by the lender in determining

Green cars can mean lower rates. Here’s why.

Electric Car sales are on the rise across most countries, as adoption has become the focus for Industry and Governments. Spearheaded by Tesla, the EV market is well and truly gathering pace and Manufacturers are having to adapt to the new found demand from consumers for these types of vehicles. It isn’t just Manufacturer’s having

Bank statements… the what, how and why?

Have you ever considered why lenders ask for your bank statements when you apply for a loan? We will explain the purpose, benefits and implications in providing them with your application. Lenders and Brokers alike have obligations under the NCCP Act 2009, to perform Responsible Lending checks on all customers who are borrowing for personal

The best Ways to Finance a Classic Car

Are you looking to purchase a Classic Car? Lenders often base their risk (and interest rates) on the age of a car but when it comes to classic cars; the same rules don’t always apply. A Classic Car tends to retain its value and perhaps even increase in value over time, so the risk to

Thinking of going Guarantor? We explain The benefits and the risks.

A guarantee is a common way for Lenders to help borrowers increase their borrowing capacity, reduce deposit requirements and to help with the loan approval. There are several types of guarantees: Parental Guarantee This guarantee is more common in home loan lending, parents offer equity in their own property to help avoid lenders mortgage insurance

E-signing – What is it and is it safe?

Since the outbreak of COVID19 in early 2020, the adaptation of online finance features has been fast tracked, and one of those features is e-signing. With face-to-face restrictions in place across states, the finance industry had to adapt quickly. The adoption of shutdowns and isolation to combat the spread of the Virus, required lenders to

Do you have a poor credit history? tips on how to get approved.

In life we can experience periods of financial hardship, often a result of significant events such as unemployment, sickness or a business downturn. This may make it difficult to meet your current loan repayments and you may fall behind, which can affect your overall credit rating and credit score. There is a broad spectrum of

Scroll to Top