The best self-employed truck loan is the credit facility that suits the operation’s tax, balance sheet and accounting method and has workable rates and terms. Securing the best possible, most workable and affordable business loans is essential for all commercial set-ups. But for individuals operating as self-employed and for those making the big move to self-employment as a contract driver or small business, the prospect of securing workable finance may be daunting.
For new start-ups the process may be particularly overwhelming. A new year is the time when many finally make their goal of working for themselves a reality. But where a heavy vehicle is integral to the business operation and financing is needed to purchase that vehicle, that goal may at times seem unachievable. It doesn’t have to be. By utilising specialist heavy vehicle finance brokers, many can secure affordable vehicle loans to ensure their operation has a great start.
To assist sole operators and those moving into self-employment, we outline the financing opportunities and resources that are available to them to assist in securing the best possible heavy vehicle finance.
Eligibility for Self-employed Truck Loan
Where vehicle finance is essential to the business operation those in self-employment should have a full understanding of the eligibility requirements for commercial credit. For new operators, how the business is set-up – the structure and accounting method may impact the choice and effectiveness of vehicle finance products. More on that below.
To be eligible for commercial credit the operation must hold a current ABN and the operator present identification. Being registered for GST is not required but all businesses with income above $75,000 must be registered under Australia tax and business laws. It can also be seen more favourably by lenders.
Commercial credit application forms require businesses to provide extensive documentation on their financial position. Lenders require 1-2 years of the annual accounts, BAS returns, income tax returns, bank statements, profit and loss statements and asset and liability schedules. If the operator has been self-employed for that period, they should have the necessary docs. Start-ups may not and they may not also meet the criteria set by some lenders for a minimum 1-2-year trading time. Newly self-employed operators can apply for Low Docs and No Docs Truck Finance.
Choosing the Right Product for Best Self-Employed Truck Loan
While all structures – sole trader, incorporated company, partnership, ABN only and trust are eligible for commercial loans, individual businesses will have their own preferences regarding balance sheet and tax deductions. These preferences, along with the accounting method used to prepare the accounts, will play a big part in which is the most suitable asset acquisition finance product.
All operators, whether new or trading for a long time, can select from Lease, Commercial Hire Purchase, Chattel Mortgage and Rent-to-Own. All can be effective for the business when aligned with individual goals and objectives.
These are secured finance with the vehicle being finance used as the finance collateral. They can all be selected to finance all heavy vehicle makes and models including Isuzu, Fuso, Kenworth, Scania and all the others. The fuel system – diesel, hydrogen, electric, does not affect the type of credit facility. New and used models are financed with the same credit products but different rates, loan amounts and terms may apply to used truck loans.
Rent-to-Own and Leasing can be particularly attractive for those in self-employment has the vehicle is not listed in the balance sheet as an asset/liability. The lender retains ownership of the vehicle while the loan is being repaid. This is often referred to as improving the appearance of the balance sheet which may be beneficial for smaller businesses.
The interest rate varies across the selection of asset acquisition credit products. While the rate is critical to repayments and the overall cost of the finance, all the features and benefits of credit facilities should be considered in making the selection as to the best self-employed truck loan for your operation. Speaking with an accountant on credit product selection is strongly advised.
What to Expect with the Best Self-Employed Truck Loan
Small operators, both new and existing, can expect to be asked for their personal financials when applying for business loans. Without a strong asset base and high turnover, applicants may have their personal details and credit profile reviewed.
Depending on the size of the loan requested and condition of the vehicle, some smaller operators may need to provide extra collateral to be approved. They may offer personal or business assets for this purpose.
For new operators applying for No and Low Docs Truck Loans, there may be limits on how much the lender will approve.
How to Get Your Best Self-employed Truck Loan
One of the greatest fears for those in self-employment requiring finance is being offered a much higher interest rate. Some small businesses will be considered higher risk and be offered a higher rate than a large company with higher turnover and significant assets. But many small businesses can achieve affordable rates, especially when using a specialist broker such as Jade to source their finance.
Our access to a large lender base and our leverage in the market enables our brokers to secure highly competitive rates for even small operators. If you’re already self-employed or considering the move, take advantage of our specialist heavy vehicle finance services to source your best self-employed truck loan.
For experts to source your best self-employed truck loan 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.
