Buying and owning a vehicle is every man's dream in Australia. But if you are a farmer or an owner driver who wants to buy a truck then things can be more difficult than buying a car. Why? The investment involved here is greater so is the risk.
Truck finance in Australia is supported by many banks and financiers. For big truck finance there can be a commercial truck loan application needed.
Usually people choose to buy a new truck through financing, which can be a sensible option especially if you are hard on cash. This process involves payment via installments making it more feasible for middle class individuals.
Truck financing is available at a bank or a private individual can also lend you money. You can choose which lender, after weighing the pros and cons of both and decide which one to go for.
People normally can think of only two ways of buying a vehicle, either pay in cash or obtain a loan. The former one is not a likely choice for most of us involved since it is can tie up valuable working capital or funds that you can invest elsewhere for better value.
Finance companies generally require three main fundamentals when approving a large truck loan. These are:
That you own a property, cash, shares or assets of real value. This is known as fallback position which means you have something to fall back on if the unforeseen bad time happens.
Working capital. Most trucking contracts don't see income until after the first month, sometimes longer. Finance companies want to see sufficient funds available that you have at your disposal to cover expenses and if there is an unexpected expense like engine trouble. This amount can be anywhere between -,000, depending on the age of the truck.
Confirmable work source. For startup truck finance applications it is important that you have sufficient arrangements for where the work will come from. This normally has to be in writing and confirming in what way will they will pay you (ie by weight, km's, load). This should also state what work would be made available to you.
Existing operations may not require this as their current financials may show affordability. Banks and finance companies can ask you for your last financials.
Truck finance can require a tailored finance application. This can require but may not require cash flows, financials and details account of your business. A commercial loans broker can be useful to do this and assuring you get your truck finance at better interest rates.
A good commercial loans broker will be able to assess your application before submitting it to a finance company assuring that it is going to the correct lender and it will have a good chance of finance approval. They should be able to assist with any cash flows, financial information and presenting your application correctly.