Large Commercial Truck Financing
Need a big truck for your business? Then you may benefit from financing the vehicle you need. If this is the case, the type of finance option you should choose and how to find the right deal for your needs are just a couple of things that you may need to consider. However, those who aren’t too knowledgeable on the process may be unsure on where to start. Fortunately, we’re here to help.
Options for big truck financing
Secured truck finance
As one of the most common types of financing, secured truck finance (also referred to as a chattel mortgage) often gives an individual ownership of the vehicle on purchase; rather than at the end of the loan. These types of funds tend to use the truck as collateral or security and generally have a 1 to 7-year loan-term.
They can also come with a few tax benefits; such as claimed GST on the purchase price, interest charged on the loan and the depreciation of assets.
Commercial hire purchase
With a commercial hire purchase, a lender will buy the vehicle and then hire it out to the borrower with the intent of selling the truck to them at the end of the loan’s term (which can often last from 1 to 7 years).
Often, with this kind of truck financing, you’ll take ownership of the asset when the total cost of the vehicle (including fees and interest) are paid off. The tax offsets are often different too, since the business doesn’t own the truck during the loan.
Lease
With leasing options, a lender will buy a vehicle and rent it out for a term. At the end of the lease, you’ll often have the choice to either continue leasing the truck or to purchase it.
Different types of documentation requirements
There are two main types of documentation requirements for the above commercial truck loans – and they are:
Full doc:
Often, full doc loans are used when a client can provide full financial statements from an accountant. Usually, the types of documentation needed can include ID verification, a quote for the truck purchase and 1-2 years of financial statements.
Low doc:
Generally, low doc loans are ideal for those who cannot provide financial statements. However, they will often require a current ABN, a BAS statement and Accounts statement, as well as 6 months business account statements. Also, if the purchaser doesn’t have any assets, some form of a deposit will be needed.
What type of commercial truck do you need?
There are several different kinds of vehicle available – and since having the right type can often be crucial in a number of ways, you may want to choose carefully. A few of your options include:
- Commercial vans
- Small, medium, or big trucks
- Tilt trucks
- Prime movers
- Refrigerated trucks
- Trailers
Things to keep in mind
If you plan to take out truck finance for a large vehicle, there are a few things that you may want to consider, such as:
- Will you need a deposit, or collateral?
- How many years have you been in the business and what industry are you in?
- Do you have any current finances or other loans?
- Do you need a brand new truck, or could you work with a used one?
- Could you refinance an existing loan?
- Do you want ownership of the vehicle during the loan?
- What’s the maximum amount to be financed?
Disclaimer
This newsletter does not necessarily reflect the opinion of the publisher or supplier. It is intended to provide general news and information only. While every care has been taken to ensure the accuracy of the information it contains, neither the publishers, supplier, authors nor their employees, can be held liable for any inaccuracies, errors or omission. Readers are advised to contact their financial adviser, broker or accountant before making any investment decisions and should not rely on this newsletter as a substitute for professional advice.
Your full financial situation would need to be reviewed prior to acceptance of any offer or product
