New business truck loans are available on a No Doc and Low Docs basis for businesses with little or no financials, through specialist lenders and finance brokers. This provides a potentially valuable opportunity for individuals to make the switch to self-employment.
The start of the new financial year is one of the busiest times of the year for individuals to make that switch. For those taking a major step to set up their own operation as a contract driver or delivery business, it may be the time to realise a long-held aspiration, or activate a plan that has been in the works for years. But does that plan include how you will source finance for your vehicles?
Even the most detailed plans to set up a new business can be derailed if affordable financing can’t be secured to purchase the required vehicles. Why? Businesses just starting out are missing a key requirement to secure finance – financial documents.
When applying for finance, businesses are required to provide lenders with at least 1 year and, in some cases, 2 years of trading figures, tax returns, annual accounts, bank statements and other financial records. An operation which has just set-up clearly will not have those records.
The solution is to connect with the lenders that offer truck loans for new businesses without having to provide the full range of documentation. Connections which we can provide with our access to no doc and low finance.
New Business Truck Loans - Options
Low Doc and No Doc finance for new operators is a description of the business applying for the loan. These loans are not specific credit products. They refer simply to operators that do not have the complete range of financial documentation which is required to be approved for commercial credit.
When an application is approved without full financials, the business has the option to select the asset acquisition credit facility that best suits their set-up and objectives. The selection includes Truck Lease, Chattel Mortgage, Commercial Hire Purchase and Rent-to-Own. The decision as to which is the most suitable credit facility is typically made in consultation with the business’ accountant.
When the finance is finalised, the business realises all the benefits and features of their selected loan type, including the tax deductions. The deductions and treatment of GST vary with the different credit facilities as does the interest rate and suitability to either the cash or accruals method of accounting.
All the asset acquisition credit facilities can be used for all types of heavy vehicles – heavy, medium and light duty, diesel, hydrogen and electrified, new and second-hand. Financing for new and used vehicles can vary with rates, terms, loan amount and collateral requirements.
What You Need for Truck Finance for New Businesses
What will you need to be eligible for truck finance as a new operator? As with all commercial loans you will need an ABN and ID. GST registration is not essential but can be considered a positive by some lenders. If you haven’t yet registered, it may be worth considering.
It is assumed that a new business will not have a full year of trading records or other financials – essentially none or very little docs, and no credit history. Applicants are urged to prepare as much detail as possible on the business’ financials including funding from the owner or investors, any work contracts already confirmed, and even the business plan.
What to Expect with New Business Truck Loans
With none or very little information on the financial position of the operation, lenders will typically look at the personal financial position of the business owner. Expect to have to provide personal tax returns and other financial documentation and have your personal credit history checked.
Asset finance allows the vehicle being financed to be used as the collateral for the loan. While established businesses will be approved without additional collateral, start-ups may not be. You may be required to provide additional assets, possibly personal goods, or a personal guarantee as extra collateral.
The loan amount approved may be less than is approved for an established operation. A larger downpayment may be required on the vehicle. The interest rate may also be expected to be higher than for businesses with a strong credit history and complete financials.
While it may sound like a lot to handle, operators that use Jade do not need to be overwhelmed. Your Jade broker will be handling the entire process with the lenders for you. We have strong connections with specialist lenders and will be negotiating for the best possible loan to get your operation up and running.
For expert support and access to the right lenders for new business truck loans, contact Jade Truck Loans 1300 000 003.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
