Everything You Need to Know About Finance & Getting Approved for New & Used Heavy Vehicle Loans
Choosing the right loan is as important as choosing the right (new or used) truck for your fleet. Commercial heavy vehicle financing can increase cash flow, the rate of successful acquisition of future contracts, work efficiency and safety. However, this all depends on the equipment type and securing the best financing for the situation and business. With various types of loans on the market, it can be daunting to decide which is best.
Read everything you need to know about commercial truck finance and getting approved.
Pre-approval Saves Time and Money
Pre-approvals can save businesses hours and increase rates of loan approvals. Commercial, financial consultants and advisors will already know who the best lenders are to approach for truck financing for the most profitable financing solutions.
More Than Credit: Loan Purpose
We tend to think about credit history and income when discussing loan criteria. Lenders also want to know how the financed equipment will benefit the business(*1).
- Will the predicted income generated by the equipment/machinery cover the loan repayments?
- Will the equipment increase efficiency, thus saving the business time?
- Is work lined up that the equipment will be used for?
Vehicle Age and Type: Client and Lender Requirements
While some loans are designed for new or used vehicles, some are only eligible for new purchases.
Your Clients’ Requirements
Some clients stipulate a minimum age of vehicles used to fulfil the contract with them. Thinking forward, what are the requirements of clients you will (or would like to) work with in the future?
Commercial Truck No Doc Loans
What is a No Doc Loan?
No doc loans are for self-employed individuals and businesses with limited or no financial information. Many self-employed people do not receive payslips. There is a range of no (and low) doc loans available for business equipment and fleet purchases.
Some low and no doc loans have upper limits (i.e., $200,000 – $500,000). Loans above upper limits may require some documentation such as prior tax return statements.
When no documentation is available, income declarations and accountant’s letters may be used(*2).
Things like your credit rating, vehicle type, and the expected income the financed vehicle will generate come into play here. During pre-approval, we will obtain a copy of your credit report which will allow us to identify the most suited lenders and financing for your needs and situation(*3).
Some commercial businesses opt for long-term finance with a balloon payment at the end of the loan term. This can be beneficial to cash flow as long-term loans often attract smaller ongoing repayments. Balloon payments give the option to pay a final lump sum at the end of the term to obtain complete ownership of the truck/s.
Commercial Truck Fleet Financing Approval: The Bottom Line
Lenders want to be confident that the financing will benefit your business and bring in income. We compare dozens of lenders and all the products they have available, including products we can tailor to suit your needs. We review:
• Loan types and fees.
• Vehicle requirements.
• GST and Tax implications.
• Repayment schedule flexibility.
• End of loan payments and vehicle ownership.
Our clients are quickly and regularly approved because we pre-approve our clients and have a business use case ready to go at the time of application.
• Quick results.
• Specialists in securing the right financial solutions for the loan purpose and business type.
Call senior commercial financial consultant, Mark O’Keeffe for fast help getting your truck financing loan approved today.
*1. Nicastro, S. Business Loan Requirements: 7 Things You’ll Need to Qualify. Nerd Wallet. 2022.
*2. A1 Accountants. Accountant’s Letter – Income Verification Letter for Loan Purposes. 2022.
*3. Johnson, S. 8 Factors That Keep You From Getting a Small Business Loan. Business News Daily. 2022. • Finance for www.rubbish.com.au Skip Hook Bin Trucks with Hydraulic Arms