When it comes to expanding your business, trucks can be the ultimate vehicles and the medium of transport that lets you reach the apex of success. Whether you want to provide deliveries or deal transport in your business, trucks can be a valuable asset for many different businesses.
For a variety of trucking companies or operators, truck finance is a lucrative process for growing a business. How does it help? It allows new assets to be purchased over years instead of having to pay for trucks in full with cash.
Truck loan finance brokers can assist with obtaining the funding needed to buy a new truck for expanding your business to a wider reach. Brokers tend to provide better finance options due to their relationship with many different financial institutions.
There are many banks as well that provide truck funding with affordable instalment repayments.
Jumping right into applying for truck finance without any proper knowledge is could result in long delays. There are a few things you prepare for before you apply for it.
Let’s explore those now.
Always Consider Your Budget for Payments:
The most vital factor that you need to consider at the very beginning is if the finance interest rates of the trucking company are affordable for you or not. Buying a new or used truck is undoubtedly a very big investment. Premium payments need to be cost-effective for your business. Higher monthly repayments for your truck funding means the finances will be costlier for your business.
In case you are thinking of making an application for truck finance at a bank, then you need to see how affordable their interest rates are. Pick finance that fits your budget before acquiring any loan. Make sure that you are opting for the best deal to achieve top results. This can mean a longer term to spread the payments over more time for easier, more affordable repayments.
Make Sure to Possess a Registered Australian Business Number:
While you apply for truck finance, a lender will seek valid information about your company. So, ensure that your company is operating with an ABN whether you operate your business as a sole trader, partnership, family trust, or as a company.
It is a mandatory requirement for all businesses in all forms to be registered for tax. Financiers will look for this.
Consider Different Kinds of Lenders:
In case you are worried about getting the right financing options, then there are many options available in the market.
Usually, there is a wide range of finance companies that offer truck finance, and each of them claims to be the best. Decision-making could be daunting for you.
You need to look at the variety of truck finances and options from lenders, which is going to give you the best and most affordable deals. Opt for proper research within different companies before you finalise one. Make sure you are choosing the one which offers you good premiums with good interest rates.
Compare Between the Various Features of Truck Finance:
Comparing the features of different truck financiers is as vital as considering the right lender for your home. As there are a variety of interest rates which are available for truck finance, there are other features that are going to affect your finance.
While you are looking for features, make sure that you are comparing between a variety of finances. Look at how flexible the finance is, and what happens if you need to delay a monthly repayment.
A good idea is to carry out a cash flow forecast using previous yearly figures and adding in the potential loan repayment amount each month.
Consider these questions when looking for finance, so it is lucrative and not stressful when managing and expanding your business.
Ask if an Upfront Deposit Funds is Required:
Starting a new business comes with a higher risk in the financier's eyes, so when you opt for truck finance, an upfront deposit will probably need to be paid to the vendor, lessening the risk associated with the purchase in the financier’s eyes.
When there is an absence of an upfront deposit, the lender can take over collateral security on other items or equipment held by your business or personal assets such as your own home.
If your business is established and a registered company then no deposit loans will be available and be more attractive.
Make Sure Your Business has a Proper Record of Total Income and Expenses:
When you apply for truck finance, you must have enough proof to show the income and expenses of your business in support of the funding. Have diligently prepared financial statements of your company is essential and something your accountant can take care of.
Having up to date, well prepared business financials for the past two years of trade will greatly assist with applying for a truck loan successfully. Your accountant can prepare a statement and also calculate potential income projections from the increase in income due to the truck purchase.
Get Your Company’s Valuable Assets Backed up Beforehand:
Before applying for truck finance, your company will benefit from a proper amount of insurance. A lender would consider that applicant's assets are properly insured and may ask for proof, especially for any assets used as collateral for finance.
It is essential to have good equity in your property if used for collateral. This can also assist if there is a major breakdown in the truck to assist with paying the bills.
Apply for the loan when you have a good working capital position because if the credit team of the trucking finance company finds that you are not going to be able to pay for one or two months, your truck finance will not be approved.
Though deciding on the ideal truck finance can be daunting, if you consider the important factors before opting for it, this will result in you getting the best deal.
Most importantly, do not forget to look for more than one lender so that you can compare a variety of options and finally choose the best one, which gives you a better prospect for expanding your business. That’s where using a reputable, experienced finance broker with access to dozens of lenders is a smart choice to save you a lot of time and stress of dealing with bank after bank.
A good business finance broker can give you access to up to 25 lenders with the best deals to save you time and some will settle the deal within 24 hours of your initial phone contact. It’s best to be prepared to move fast on the finance by having your figures ready.