When new vehicles are required, for most operators, that usually means financing is also required. But while most business owners are familiar with what’s required to buy a vehicle, not all will be as familiar with what they need to apply for a truck loan.
While commercial lending is not regulated in the same way as the consumer credit sector, lenders still have fairly similar requirements when it comes to finance applications. The extent to which an operator meets those requirements can have an impact on any finance offer – the interest rate, collateral, and terms and conditions. So it is important to understand lender expectations to ensure you secure the best possible finance offer.
Experts in heavy vehicle finance, Jade Truck Loans assists operators to apply for a truck loan by advising the requirements and handling the paperwork. We advise on the documents required by the lender that is best suited to the individual profile. Ensuring as many boxes are ticked as possible to meet the requirements for the best interest rates and most workable outcomes.
In general terms, the same documents and requirements will apply to all commercial entities with some special requirements for sole traders. The same application requirements apply for all truck purchases - whether purchasing a heavy-duty Kenworth, IVECO or Fuso medium or light-duty or any other vehicle from leading brands, the application requirements will be the same. Some special requests may apply for used compared with new vehicles.
Follow this brief guide to start preparing and speak with one of our experts for further information and to get your application underway.
Essential Pre-requisites for Heavy Vehicle Financing
Heavy vehicle financing is commercial credit and available only to commercial entities. Applicants will need to hold a current ABN – Australian Business Number. Recently acquired ABNs can be accepted by lenders.
As with most financial dealings in Australia, verifiable identification is essential when apply for commercial loans. ID of the business operation and potentially ID for owners, directors or business partners. Your Jade broker will advise the specific ID documents.
Being registered for Goods and Services Tax (GST) is not a pre-requisite for eligibility, but is seen as desirable by some lenders.
Loan Type and Amount
Lenders will want to know the type of credit facility being applied for. The selection includes Chattel Mortgage, Truck Lease, Hire Purchase and Rent-to-Own. We recommend engaging with an accountant in deciding which is the most suitable facility for the operation.
The amount required for the finance will be needed. Not essential but useful for our brokers, is advising preferences in finance term, balloon and monthly payments. This provides us with a guide to negotiate with our lenders to achieve the most workable outcome.
Financial Documentation to Apply for a Truck Loan
Quite extensive documentation is required for a commercial finance application form. But these documents should be readily accessible for most businesses. Turnover figures are very important, at least for a minimum 12 months. Though we do have lenders that will approve loans with 6 months of figures.
Annual accounts and the latest tax return are required, along with bank statements and BAS statements. Your Jade broker will advise for what timeframe these statements should cover. Schedules of assets and liabilities and profit and loss are typically requested. These are often included in the annual statement of accounts for companies.
Special Requirements for ABN Holders, Sole Traders
Where an entity operates as a sole trader or on an ABN-only basis, it can be expected that lenders will also request a range of personal financial information for the business owner. These details will be similar to the business financials – tax return, asset/liabilities schedule, and bank statements.
Vehicle Details
Information will be required on the vehicle being purchased – brand, type, year, new or used, specifics VIN and engine numbers where applicable, whether cab only or cab and body, details of the body, trailer, and any modifications. The purchase price is also required and typically provided via an invoice from the dealer. Much of the detail required may be included on the dealer invoice.
Lenders will be assessing age and condition of the vehicle as suitable collateral and the value and price to approve credit limits.
Collateral Needed to Apply for Truck Loans
A major concern for many operators can be what collateral they need to get approved for heavy vehicle financing. We can secure financing for many applicants based on the vehicle as the sole form of collateral for the loan. This typically applies to most new vehicles.
With used vehicles, the age and condition are assessed. If not considered acceptable as sole collateral, operators can provide additional security with business or personal assets.
Lenders will be assessing the strength of the financials, especially the assets/liabilities and turnover, when deciding if additional collateral is required for an individual applicant. Your Jade broker will be handling these negotiations and working towards the best outcome.
Credit History & Score Requirements
The credit history and profile of the business is reviewed by lenders as an essential part of the application approval process. While this is not information that the business owner can provide, it is important to appreciate that a good credit history and score applicants are typically offered better interest rates.
How Jade Assists Operators with Truck Loan Applications
Despite the quantity and extent of documentation required to apply for a truck loan, we make the process streamlined and simple. On contacting us you will be assigned your own Jade broker to handle your specific application. We work through all the details with you and handle the negotiations with lenders to achieve the best rate and best offer.
Where a business operator cannot produce all the required information and documentation, we do have lenders that approve workable finance on a no doc and low doc basis.
To apply for a truck loan quickly and easily, contact Jade Truck Loans on 1300 000 003 or connect online.
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.
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