New business truck loans are loan approved to start-ups with minimal financials, facilitating the transition to self-employed owner-driver for many individuals. The new financial year is a popular time for many individuals to finally make that big step into self-employment with their own vehicle. Contract owner-drivers make up a large portion of the transport industry and while it may be a tough working environment at times, it can be rewarding. But making the transition from being employed to working for yourself can be a challenge.
The major obstacle can be securing affordable finance to purchase the essential vehicle. While not all lenders will approve finance applications without a complete set of business records and documentation, there are lenders who will, and we provide access to them. Access to the right lenders and access to a smooth transition and set-up for new operators. We explain what is required for heavy vehicle finance for start-up operators.
What are new business truck loans?
To apply for heavy vehicle finance, businesses need a range of financial documentation to fully complete their application. These documents comprise tax returns, bank statements, annual accounts, turnover figures, asset and liability statements, BAS returns and profit and loss statements. Some lenders also include a minimum trading period and minimum turnover as essential requirements for loan approval.
Operations that are just starting up, will not have all those financials and will have minimal if any turnover. New business truck loans are finance for heavy vehicles for businesses that are newly set-up or starting up. They are referred to as low doc, no doc and without financials loans. These are not credit products but describe the business applying for the finance. It can refer to an individual setting up as a sole operator, a partnership or a small company.
New Business Truck Loans Requirements
Every finance application is individually assessed and addressed. But there are some essential requirements which are having identification and a current Australian Business Number (ABN). The ABN may be recently obtained. Being registered to claim GST is not essential but many lenders see GST registration as preferable. Where a business has annual turnover of $75,000+ they must be registered for GST.
Applicants are advised to present what financial figures they have accrued. Preparing simple accounts spreadsheets can be acceptable. Including specifics of any work or contracts that have been confirmed may strengthen the application along with the business plan.
With no or very little business financials to support the application, lenders typically request the financials for the business owner – their personal financial records. These may include personal income tax returns, bank statements, assets and debts on other loans, and similar. The personal credit profile of the owner is assessed.
Extra loan collateral, in addition to the vehicle being financed, is often requested. Business owners may provide this security with assets they own such as vehicles, equipment and subject to approval, a personal guarantee.
Credit Facilities for New Business Truck Loans
When a start-up operator is approved for finance on a low doc or no financials basis, they can select the commercial credit product that best suits their accounting methods and objectives. The selection includes Chattel Mortgage, Leasing, Commercial Hire Purchase and Rent-to-Own.
Start-ups can often gravitate to Leasing and Rent-to-Own as the vehicle ownership is held by the lender. This means the operator does not need to enter the asset into their accounts/balance sheet. These credit facilities are referred to as ‘improving the appearance of the balance sheet’. An aspect which may be beneficial to an emerging enterprise.
No Doc Loan applicants can expect that the interest rate they will be offered will be higher than the best rates advertised by lenders. The best rates displayed by Jade, and other lenders are for businesses with good credit and on new vehicles.
Rates, terms and repayments are fixed and all loan product features can be realised including balloons, residuals and tax deductions. To start working up a finance budget, use our latest rates as a guide when using our Finance Calculator.
Suitable Vehicles for New Business Truck Loans
No and Low Doc finance can be used to purchase all types of new and used heavy vehicles. That includes light, medium and heavy-duty, diesel, electric and hydrogen from all leading manufacturers including Isuzu, Fuso, Kenworth, IVECO and others.
Many start-ups will look to used vehicle market for lower priced units than the new vehicle market offers. While the price can be lower, the finance on used vehicles may attract a higher interest rate and different loan limits compared with new vehicle finance.
The loan amount approved to the individual operator may determine the vehicle they can afford. Getting pre-approved finance enables operators to know their borrowing limit ahead of time, and search for vehicles priced within that range.
Using our broker services can be an invaluable benefit to new operators. We provide access to specialist non-bank lenders, handle all aspects of the loan sourcing and structuring, and support operators on what may be their first commercial finance experience.
To make the transition to self-employment as seamless as possible with truck financing, contact Jade Truck Loans on 1300 000 003 for workable new business truck loans.
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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