Self-employed and need finance to upgrade your vehicle? Considering going out on your own but need heavy vehicle finance to make it happen? Owner driver truck loans are heavy vehicle finance for self-employed operators, small businesses and new operators who may require low doc or no doc approval. Finance may be approved for self-employed operators for all types of heavy vehicles, new and used, light, medium and heavy duty, trucks and trailers, from all leading brands including Isuzu, Kenworth, Hino, Mack and others.
While finance is available for all types of commercial entities, depending on the specifics of the operation, self-employed operators can often have difficulty securing affordable solutions. Knowing what is involved in getting approved for the best truck finance interest rates and most workable solutions, and what services are available to assist, may simplify and streamline the entire process and result in a better outcome.
Owner Driver Truck Loans for Different Set-Ups
Owner drivers and contractors can have different business set-ups, structures and trading histories. Some may be new operation, some may have operated as self-employed for many years. Some may operate as a sole trader with an ABN only, some under a company structure. Regardless of the structure of the business, self-employed operators are essentially small enterprises, and that aspect can lead to issues with securing financing.
Small companies with financial records over multiple years can typically meet all the requirements for a commercial finance application form. New businesses by their very nature do not have complete financials and may require loan approval on a no doc or low doc basis. Businesses with turnover below the minimum requirement set by some lenders or who have traded for less than a lender’s 12-24 month minimum, may also be categorised as low doc applicants.
Low doc, lite loans and without financials finance are not offered through all banks and lenders. Operators requiring this type of vehicle may benefit by engaging a specialist heavy vehicle finance broker to source their loan. We have connections with non-bank lenders that do approve self-employed vehicle finance at workable rates and terms.
Owner Driver Truck Finance Facilities
Regardless of the turnover or trading period of a business, the same commercial credit facilities are used to finance heavy vehicles. Asset finance is provided with Chattel Mortgage, Lease, Rent-to-Own and Commercial Hire Purchase. These facilities vary with tax deductions, GST treatment, interest rates and how the asset is treated on the balance sheet.
Deciding the most suitable involves assessing the features of each against the accounting method and objectives of the business. Consulting with an accountant is strongly advised to determine the credit facility which will deliver the most workable outcome for an individual business.
Smaller and newer businesses and those that upgrade vehicles regularly may be attracted to the balance sheet benefits of Leasing and Rent-to-Own. Operators planning to keep vehicles over a long term may consider Chattel Mortgage with the best asset finance rates and deductions through asset depreciation.
Collateral and Deposit Requirements
A key consideration for small businesses taking on finance can be what collateral and what deposit they will need. Asset finance allows for the vehicles to be used as security against the loan. Whether the vehicle is accepted as the entire collateral requirement, will depend on the lender’s assessment of the application and the vehicle. New models are generally readily accepted as collateral while second-hand vehicles will need to be assessed.
The lender’s decision may depend on the strength of the turnover, trading history or prospects and other aspects of the application. Where additional collateral is required, small operators may draw on personal assets or may be approved with a personal guarantee.
In regard to deposits, lenders do not stipulate how much a loan applicant must make as a downpayment on a heavy vehicle. What they do decide is how much credit they are prepared to approve. This can determine the deposit required. Strong applications may be approved for no deposit finance – borrowing 100% of the purchase price. Less strong applications may be seen as a higher risk and not be approved for no deposit truck finance. Resulting in a deposit required.
Owner Driver Truck Loan Interest Rates
Interest rates are critical to affordable heavy vehicle finance. Small businesses, especially in the trucking sector where the income is totally reliant on the operator being on the road driving to derive turnover, may be seen as a higher risk. Resulting in a higher rate offer than would be offered to say a large trucking company.
All rate offers are dependent on individual applications and connecting with the right lender. Our brokers connect customers with their most suitable lender to ensure those critical best rates are achieved.
Application Requirements for Owner Driver Truck Loans
Commercial credit applications all require an ABN and identification as a minimum. Operators do not have to have GST registration, but it can be considered a positive. Financial records and documents on the business activities are required. These include tax and BAS returns, bank statements, profit and loss statements, asset and liability schedules, current accounts and similar. Credit profiles are checked.
Smaller operators, whether new or established, may also be required to provide personal financials and have their personal credit profile checked. All applicants are encouraged to prepare as much detail on their business, even simple income and outgoings spreadsheets, to support their application.
Finance Broker Services for Owner Drivers
All sized businesses can use truck finance brokers to source their loan. By having professional experts in asset finance handle the loan on the behalf, self-employed operators may realise significant benefits including better rates, connections with suitable lenders, time savings, and a faster more streamlined loan approval for a better outcome.
To have your owner driver truck loans handled by the experts, contact Jade Truck Loans on 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.
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