Many truck owners and operators are facing extremely challenging situations at the moment. The economic effects of the tight labour market and soaring inflation are placing pressures on many businesses and the impacts of recent floods have added further issues for many. But there are a number of deadlines looming which should be noted by business owners and operators and those with intentions to purchase new vehicles. This truck finance update includes details on the deadlines for temporary full expensing, director ID numbers and the assistance available for NSW flood victims.
Reminder: Key Tax Measure Deadline
It’s understandable that current issues may have caused many to push new vehicle buying decisions to the back burner of late. But with the recent and persisting issues around supply combined with the deadline for a major tax benefit, it could be time to move buying decisions to the fore.
Temporary full expensing (TFE) for eligible asset acquisitions by eligible businesses will expire on 30 June 2023. This attractive tax measure, introduced to stimulate the economy during the pandemic, allows for the full asset purchase price to be claimed in the year of the purchase. That leaves just over 6 months for businesses to acquire those assets with the suitable finance in order to meet that deadline.
While that may seem quite a way off, supply and time to build trucks to order should be taken into account. This is especially relevant where there could be an extended lag between order and delivery. Supply of components has and continues to impact many manufacturing sectors and with the holiday season looming, the usual manufacturing facility shutdowns over that time could cause further delivery delays.
For those interested in taking advantage of TFE, Chattel Mortgage Truck Finance is considered as the most appropriate form of finance. With this loan type, the buyer takes immediate ownership of the truck and it is posted to the balance sheet and as such a depreciable asset.
An added attraction to Chattel Mortgage at the moment is the interest rate. As the RBA continues with further rate rises, paying even greater attention to truck loan interest rates may be critical to maintaining cash flow. Chattel Mortgage attracts a lower interest rate compared with Truck Leasing and Rent-to-Own.
Gain insights into Truck Finance & Leasing Interest Rates through pre-approved finance, which equips operators with essential information to confidently proceed with new vehicle orders. It's important to note that these loans come with a validity period. In the event that the loan validity expires before vehicle delivery, a requote would be necessary, considering the prevailing rates at that time. Nevertheless, pre-approved finance plays a crucial role in offering valuable indications regarding the approved loan amount for a business, as well as providing a reliable estimate of finance repayments. These insights serve as a solid foundation for making informed purchasing decisions.
Alert: Director ID Deadline 30 November
A very important deadline is just ahead for directors of companies. Under new ASIC regulations, all directors of companies must have a Director Identification Number. The deadline to have a Director ID is 30 November 2022. The process to get a number is quite simple once the necessary documents/information are gathered. Director ID numbers are applied for at the ABRS.
To assist directors with the process, we recently posted an explainer article with tips and hints on simplifying the process from someone who had already undertaken the process. The penalties for non-compliance are significant and may include deregistration of the company and financial penalties amounting to thousands of dollars.
Apart from the hit to finances from the penalties, impacts to the business could have effects on current loans and future finance prospects. This is an issue which has slipped under the radar for many company directors. We urge all relevant people to address this as a matter of urgency to avoid negative outcomes and penalties.
Central West NSW Floods
The ongoing flood crisis in NSW poses significant challenges for numerous truck owners and operators. Many have suffered the loss of vehicles to the floods, while others are grappling with work disruptions and road damage that affects their routes. Agricultural producers are facing crop losses, and those aiming to salvage their harvest are worried about transporting their produce to market amidst road damages.
Truck owners who have experienced flood-related losses should initiate contact with their insurers to start the process of filing insurance claims. However, when the truck is still under finance, it's crucial to inform the lender as well and, if necessary, request relief or adjustments to truck loan repayments.
Even in cases where trucks are rendered inoperable and written off, the operator remains responsible for fulfilling finance payments to avoid the repercussions of defaults.
For individuals needing swift replacements through new financing, our team specializing in Business Finance - Commercial Loan Options is readily available to expedite approvals and manage paperwork to ensure streamlined settlements. It's important to note that operators don't need to wait until their insurance claim is settled before pursuing new truck finance.
For those anticipating substantial work disruptions and subsequent income loss due to the floods, reaching out to Jade Truck Loans is advisable. You can discuss options for pausing repayments or exploring temporary finance solutions tailored to your needs.
Be Aware of the Next Wave
With daily reports of COVID-19 case numbers a thing of the past, many may not be aware of reports that Australia is in the throes of yet another possible COVID wave. Implementing some level of measures in the workplace may assist business avoid case numbers soaring and the resultant increase in sick leave which can seriously impair operations.
Next Interest Rates Decision
In regard to truck loan interest rates, the next decision on the cash rate is due from the RBA Board on 6 December.
Contact Jade Truck Loans on 1300 000 003 for truck finance.
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.