As we approach the beginning of 2022, the decisions that businesses make for the coming year are taking center stage. If your plans involve acquiring a new truck in the upcoming year, we're here to provide you with a comprehensive update on the available truck loan options and the potential tax benefits that await.
After navigating through two challenging years, businesses are now more focused than ever on managing expenses and operational costs. The latest generation of vehicles presents opportunities for enhanced fuel efficiency and other features that can substantially reduce maintenance and repair expenditures. This makes upgrading to new models a prudent and practical business decision.
While embracing the advantages of a new vehicle, it's equally important to ensure that monthly expenses remain manageable. This underscores the significance of securing a cost-effective truck loan. At Jade Truck Loans, we understand the critical role of interest rates in this equation, and our commitment lies in obtaining superior and more affordable interest rate truck loans for our valued customers.
For those who may not have embarked on an upgrade in recent times, a quick overview of the truck loan landscape might be in order. Understanding the available loan types, the associated benefits, and the options available for businesses with unique circumstances, including those with bad credit, can empower you to make informed decisions.
Selection of Truck Loans
No matter the size, brand, or model of the truck you're aiming to acquire, business owners have a consistent array of truck loan options at their disposal. It's important to acknowledge that new and used trucks may come with varying interest rates and loan terms, but the fundamental loan types are accessible for both categories of purchases.
The range of truck loan products includes:-
- Truck Lease
- Truck Rent to Own
- Chattel Mortgage which is also known as Equipment or Heavy Vehicle Loan
- Commercial Hire Purchase or simply Truck Hire Purchase
The most popular of these loans tends to be Chattel Mortgage as a secured format loan and Lease which offers businesses an off-balance sheet alternative. We offer loans across the range for the truck only or a truck and trailer combo where the price of the truck and a separate trailer can be combined into the same finance deal. Loans apply to built-to-work and cab with custom body where the two are purchased concurrently. If you're interested in a deeper understanding of financing options, you may find it beneficial to explore How Chattel Truck Mortgage Loan Works, shedding light on a viable approach to tailored financing.
When determining the most fitting truck loan product for both your business and the truck you're acquiring, business owners typically take a variety of factors into account.
One pivotal factor is the accounting method utilized by your business. Chattel Mortgage suits businesses employing the cash method, whereas leasing and rent-to-own align better with businesses following the accruals method. If you're uncertain about which method your business uses, consulting your accountant is advisable.
Another consideration revolves around your business's approach to the balance sheet. Some operators prefer not to list the value of a new truck as an asset or liability on their balance sheet. Lease and rent-to-own options cater to this preference, as the lender retains truck ownership throughout the loan term. This leads to the truck not being listed on the borrower's balance sheet, and these loans are often referred to as bolstering the appearance of a balance sheet.
With Chattel Mortgage, ownership is transferred to the borrower once the deal is concluded, thus listing the truck on the business's balance sheet.
Every business finance product includes a tax-deductible aspect, but the method and timing of this benefit realization differ among loan types. In the case of lease and rent-to-own options, repayments are tax-deductible as operating expenses. Chattel Mortgage, on the other hand, features repayments that are not fully deductible (only the interest portion), with the primary deduction coming from depreciation allowances.
While perhaps not a direct selection criterion, the range of interest rates across different truck loans could indeed influence your decision. Chattel Mortgage tends to have the lowest rate, whereas rent-to-own options typically have higher rates. However, when making substantial business decisions, it's important to consider the comprehensive package features.
Tax Benefits Per Loan
The biggest buzz in asset acquisitions since April 2020 has been Instant Asset Write-off and temporary full expensing. Essentially the same concept but with varying eligibility criteria. Chattel Mortgage is the most suited finance product to realise the benefits of TFE.
For eligible acquisitions by eligible businesses this is available for acquisitions made through to June 2023.
Low Doc and No Doc and Bad Credit Truck Loan Opportunities
The past year has highlighted a mix of challenges and opportunities for businesses. Some have seized the chance to establish their own ventures, while others have grappled with difficulties that have led to credit issues.
At Jade Truck Loans, we specialize in truck financing and hold accreditations with unique non-bank lenders who provide loan solutions for businesses encountering obstacles in obtaining truck loans through traditional banks and certain other lenders. If you're in the market for a new truck but facing difficulties securing a loan, reach out to us to explore how we can assist you.
As we approach the end of 2021, it's a perfect time to start planning for 2022. If your goal is to kick off the new year with a brand-new truck, contact us today to discuss the options for obtaining an affordable truck loan.
Contact Jade Truck Loans on 1300 000 003 for cheap truck finance.
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.