Truck financing decisions around lender selection, the best rates, credit options, loan amounts and terms can impact the total investment outlay in the vehicle. Adopting a strategic approach to sourcing heavy vehicle finance may result in a less expensive loan, less total interest payable, and overall, a lower total outlay for the vehicle. As specialists in heavy vehicle financing, we provide insights into what operators may consider, to reduce the cost of investing in new vehicles.
Truck Financing with Different Lenders
Business owners can source loans for assets such as heavy vehicles through numerous lenders. Banks, finance companies, vehicle manufacturers and dealers provide commercial asset finance. When selecting a lender, operators need to consider whether that lender has the approval criteria and guidelines that fit with their profile and requirements.
The guidelines for loan application approval that are used by lenders do differ. Selecting the ‘less than perfect match’ lender may result in stricter loan conditions, higher rates, or even the loan application being rejected. This is where using a specialist heavy vehicle broker such as Jade can be extremely effective. With access to a large number and different types of lenders, we can provide operators with the lender that is best suited to their profile.
Our lenders include those that approve loans without financials, ABN loans and can offer possibilities for bad credit truck loans.
Selecting the Right Truck Financing Facility
All brands from heavy-duty Macks through to top selling Isuzu models can be financed with the same asset acquisition credit facilities. The selection of loan types includes Rent-to-Own, Commercial Hire Purchase, Leasing and Chattel Mortgage.
Selecting the credit facility that suits the accounting method used by the business, suits the balance sheet strategy of the business, and will work with their tax deduction preference is critical to achieving a workable loan. Chattel Mortgage works with the cash accounting method, Hire Purchase with cash and accruals accounting, and Lease and Rent-to-Own with the accruals accounting method. Consulting with their accountant on the righty options is recommended for all business owners.
Sourcing the Best Truck Loan Interest Rates
As with differences in approval criteria across the lending market there are also differences across the sector in asset finance interest rates. Securing the lowest possible rate is key to ensuring the lowest possible investment outlay.
Finding the lender offering the best rate can be facilitated more quickly and easily by using a broker. We have the systems and market intel to know where the best rates are found at any particular time.
Rate offers vary with the specifics of the application. Operators can take steps to shore up their prospects of achieving their best rates. Paying down other debts to improve the overall financial position may contribute to a better rate. Maintaining a good credit rating is always key to the best loan offers.
Structuring Truck Financing
Strategically structuring the loan can contribute to reducing the total loan cost and to delivering repayments that work with cash flow. Both very important issues for most businesses. Reducing the total outlay for a new vehicle may be achieved by reducing the overall total interest payable on the loan.
Total interest is calculated based on the amount borrowed, the interest rate and the term of the loan. A key step is of course securing the best possible interest rate through the right lender. Reducing the amount required to finance the vehicle may be addressed by considering making a downpayment.
The loan term should also be considered. A longer term will provide operators with lower monthly payments but will attract a larger total interest on the loan. A shorter term can mean a higher monthly outgoing but less in total interest. Using our Finance Calculator, operators can change the values and see how the term may affect their particular loan.
While not directly affecting the overall investment cost, the monthly repayments do have a direct effect on the cash flow and financials of the business. Using the balloon payment with Chattel Mortgage and Hire Purchase may be used strategically to deliver a monthly figure that will work for the business. Residual values are available with Leasing and will impact the monthly payment but are subject to ATO guidelines.
Working Out Your Loan Strategies
So how do you achieve the right combination of loan elements to deliver on your requirements? Operators can use our Finance Calculator and change all the values until their ideal loan solution is established. They can also use our specialist services and expertise to advise on a loan structure that will deliver a workable, affordable solution.
For truck financing solutions that will minimise investment but optimise outcomes, speak with 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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