A finance broker isn’t a bank but they have access to potentially dozens of lenders, all in one place. That means they work for you, not the banks to obtain finance with a deal that suits your business needs, without all the runaround.
A truck finance broker secures a loan on behalf of their customer for a truck or business equipment purchase. These professional brokers gather client's information and decide which finance lender is likely to approve their loan. Once the loan is approved and the transaction is completed, the broker receives their commission from the financier. That said, why do truck loan applicants need the service of a financial broker and how can they facilitate the loan application process?
Ability to Handle Complex Financial Transactions
Financial negotiations can be a pain in the neck for the average customer to handle especially when they have no related experience. On the other hand, finance brokers usually have a solid background in the banking sector and understand the nitty-gritty of the kind of information most finance companies are looking for when dealing with a complex transaction.
In most cases, the finance broker that you use can determine whether your loan request will be approved or declined. Finance brokers understand the right information to provide and how to present them - to boost chances of loan approval.
Moreover, some financiers approve loans under unfavourable terms and conditions. That's where a professional finance broker can negotiate these terms and deliver a more favourable outcome.
Reduces Customers Credit Risk
When a company continues to collaborate on loan contracts with a single lender, it may impair their ability to borrow and grow their business. A client that lends from only one lender might quickly reach their optimal funding limit.
A professional truck finance broker will establish a solid relationship with their long-term customer and help them secure deals with other finance companies. This improves your credit history that might attract further funding from other financiers.
Always Available Around the Clock
Customers should be able to easily contact their broker via mobile or office numbers. Brokers usually attend to customers' inquiries even after working hours or on weekends. Being able to contact your broker anytime can be beneficial especially on weekends when you're looking for a truck or equipment to purchase and trying to seek advice on whether they can be financially covered. However, keep in mind that you might not receive the same attention level as every broker.
Specialised in a Specific Financial Field
Most finance brokers have a specialty in a particular financial field. Let's take, for example, a home loan broker who only deals in home loan finance, while an equipment broker helps secure finance for truck loans and other heavy equipment for businesses.
This means that a broker who specializes in a particular field understands the chops and onions of the field making sure they help customers secure more favourable truck funding options. Finance brokers have multiple connections in the industry and are always abreast of any industry information like policy changes in the financial sector.
In Australia, some good brokers will ensure the vehicle is unencumbered, making it safe to settle on buying the truck, without concerns of it being taken.
Can Access Private Funders
Most people looking to finance their truck only have access to funds from banks. On the other hand, truck loan brokers have access to private funders that lend money to people looking for trunk finance. There are situations where the banks may not accept certain conditions or throw in unfavourable terms, but the private funder may work around these conditions in another approach with a different lender.
Private funders may consider the following deals:
- Low Doc loans
- Specialized goods
- New start businesses
- Complex transactions
Embrace Long Term Connections
Often, clients of banks go to contact their finance lender they're used to doing business with and are shocked to find that person is no longer working in the sector and have moved to another sector of the bank or branch.
Reputable truck finance brokers allocate the same person to an account. That means when you obtain finance once, you can go back and talk to the same person in the company who you have built rapport with and who knows a lot about your business, needs and situation.
How Do You Get Truck Finance?
As mentioned earlier, getting a commercial truck is a high cost and has a lock-in agreement spanning years. Having a good truck finance broker you can rely on to assist with truck and other equipment purchases will give you peace of mind.
Although many companies depend on truck finance to purchase essential trucks for their business, the truck obtaining process can be challenging. To increase your chances of getting approved, you need to figure out the basis of obtaining a loan even if it's your first time!
What Criteria do Finance Brokers Use?
For a successful truck finance loan approval in places like Australia, you need to meet certain criteria that the financiers consider when confirming if a business can pay off its loan repayments and on time. These criteria could be important information about your business, including how long your business has been in operation.
Most truck finance brokers would prefer to arrange a loan for a well-established business as it increases their chances of obtaining finance. However, some lenders also provide lending packages for startups and new businesses with limited history.
Having a solid credit history and a strong financial background can improve your chances of getting approved at a decent interest rate. Before you apply for a truck loan, you must have all the proper financial information to present, along with detailed tax and income information.
You have a higher chance of getting approved if your business can provide proof of low credit risk and good cash flow.
Other important factors are the type of truck to be financed and the type of loan being requested. Many lenders avoid long-term loans due to their high risk of repayment. When looking for truck finance, going for a cheaper or second-hand model can increase your chances of getting approved.