2023 could be the year to set up that new business and/or branch out into working for yourself as a contractor or owner-driver with a new truck. Where that business requires a vehicle in order to do the work, then the new business will likely also require truck finance. Affordable truck loans for new owner-drivers and for other new businesses can be challenging to source as Low Docs and No Docs finance is usually required. Finance which is not offered by all banks and lenders but can be an essential requirement for those starting their own, new businesses.
Many new set-ups can be excluded from sourcing business finance as they do not have the paperwork or financial records, known as documents or docs, to meet the application criteria. In addition, some lenders also include the criteria for a minimum trading period. This may be up to 2 years that the business must be operating and trading before being eligible to apply for business finance through that lender. Criteria which a new owner-driver in the throes of setting up their own operation simply cannot meet.
A workable solution is sourcing Low Docs and No Docs Truck Loans from specialist lenders through Jade Truck Loans. This type of finance can be achieved at affordable interest rates and present a cost-effective finance solution for new owner-drivers and other small new businesses that require a truck for their operation. We outline the details for these types of truck loans including the tax benefits which can be realised, what is required and how we can assist owner-drivers with achieving the cheapest interest rates.
What’s involved with Low Docs and No Docs Truck Loans
The names - Low Docs and No Docs Truck Loans, are a fairly literal description of this type of finance. They are loans to purchase trucks for businesses that have very little (low) or none (no) of the financial records and documents (docs) that are usually required for business finance applications. The description is a reference to the business applying for the finance, it is not an actual loan type or finance product.
The types of docs that this is in reference to, can include a range of different types of records and documentation relating to the finances, income and expenses and trading history of a business enterprise. Documentation such as BAS returns, income tax returns, annual accounts, bank account statements, etc.
Some new businesses may have some of this documentation while others may have none. The number and quality of the documentation presented with the truck loans application would determine whether the application requires Low Docs or No Docs finance. The features of these are similar, except that the presentation of some documentation can enhance the application and may attract a better finance offer. So applicants are encouraged to prepare what finance and/or accounts type documents they can to accompany the finance application.
While documentation is not essential, holding an ABN which is current and producing identification is essential. In regard to being registered for GST, that is not a requirement but can be seen as enhancing the application.
As the business would yet to establish its own credit profile and as most owner-drivers are sole traders, the personal credit rating and history of the owner is highly likely to become part of the application assessment by the lender. Those planning to set-up their own business are encouraged to review their personal credit profile to ensure it is in a good range to attract the cheapest interest rate truck loans.
As this type of finance is not readily available through all banks and lenders, new owner-drivers can utilise our specialist truck finance broker service to access the lenders offering this solution. We are accredited with many non-bank lenders that only offer finance solutions through their select group of brokers. Our consultants have the expertise and access to not only source low doc and no doc truck loans on behalf of customers, but also to negotiate the cheapest interest rates and the finance conditions.
Workable and cost-effective solutions, including better interest rates, can be achieved for new owner-operators requiring low doc and no doc truck loans. For some applicants, there may be extra loan conditions such as added security, a limit on the amount of the loan and possibly the term. Conditions may be dependent on the credit profile of the owner-driver and the amount of documentation that can be provided.
Loan Types for New Owner-drivers
Low doc and no doc describe the applicant and once the application has been approved, applicants have the choice, subject to any conditions or requirements from the lender, of which of the range of truck loans products will best suit their operation. These include Rent to Buy, Commercial Hire Purchase, Truck Lease, and Chattel Mortgage.
When the finance is secured, new owner-drivers can realise the tax deductions and benefits of the relevant truck loans. This includes Instant Asset Write-off or temporary full expensing. where the criteria is met.
Don’t let issues around sourcing cost-effective truck loans scuttle your plans to set-up your own business with a new truck in 2023. Solutions are available and we are ready to assist in sourcing the most appropriate one that meets your requirements and your business objectives.
Contact Jade Truck Loans on 1300 000 003 to discuss truck loans solutions for new owner-drivers.
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.