The trucking industry is huge in Australia, with thousands of trucks crisscrossing the country’s roads daily. The industry is worth billions of dollars, but owning and operating a truck can be expensive. Many businesses need a cash injection to keep their trucks on the road.
Here’s what you need to know about truck financing in Australia and how to find the funding solution that fits your needs.
What Is Truck Financing?
Truck finance is a great way to get the money you need to buy a truck or heavy vehicle. This type of finance gives you the working capital you need to purchase the truck without using up all your cash reserves.
With a commercial truck loan, you can choose several repayment options that best suit your business needs. You can make repayments weekly, fortnightly, or monthly, and even tailor a repayment schedule that fits in with your cash flow. You can also make lump sum repayments whenever you have extra cash available, which can help reduce the overall cost of the loan.
Truck Financing Options in Australia
Credit providers like banks offer truck financing deals with various arrangements, such as the following:
1. Commercial Hire Purchase
Commercial hire purchase allows you to evenly spread out the cost of a new vehicle by hiring it from a lender for a set period. You make fixed monthly payments during this time, and at the end of the period, ownership of the vehicle transfers to you.
2. Finance Lease
A finance lease is a lease in which the lender purchases the vehicle on your behalf. However, you do not have ownership of the vehicle at the end of the lease. You may have the option to pay the vehicle’s residual value to own it or return the vehicle or upgrade to a new lease.
3. Chattel Mortgage
A chattel mortgage is a loan that allows you to borrow money to buy a vehicle. The vehicle serves as collateral for the loan, and the lender takes out a mortgage on the vehicle. If you fail to repay all or part of the loan, the lender can repossess your truck. The loan is typically repaid over time, and at the end of the loan period, the mortgage is lifted, and you own the vehicle outright.
4. Business Car Loan
If you own a business, you may be able to finance a new or used vehicle through business finance. This can include motorcycles, work vans, or caravans. However, you can only apply if the vehicle is used for business purposes at least 51 per cent of the time.
5. Operating Lease
An operating lease is a rental agreement where a business can lease heavy vehicles and equipment from a lender. The lender owns the vehicles and equipment, and the business pays monthly rental payments to use them. At the end of the lease, the business can return the vehicles and equipment to the lender.
Starting a trucking business can be expensive, but there are several ways to finance your venture. You can use your savings, take out a loan, or seek investment from others. Whatever route you choose, be sure to do your research and create a solid business plan. With careful planning and execution, you can turn your trucking business into a success.
Rpm Finance is Australia’s leading asset finance broker. We strive for excellence in everything we pursue and look forward to helping you achieve your financial goals. We believe that loans have to be user-friendly, convenient and easy to follow. If you need asset finance solutions for your trucking business, we can help! Call us at 1300 209 496 to get a quote today!