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Navigating truck finance can be daunting, but it's essential for businesses in the long-haul transport industry looking to grow and meet increasing demands. This guide will cover all you need to know about truck finance, helping you make informed decisions for your business.
What is Truck Finance?
A guide to truck finance would not be complete without understanding what it involves.
Truck finance is a type of asset loan designed to help business owners acquire heavy vehicles, such as trucks, by spreading the purchase cost over time. This approach allows companies to invest in essential equipment without bearing the full upfront cost, freeing up cash flow for other business needs.
There are different levels of documentation required to obtain truck finance, depending on your business's financial history:
- No Doc: Requires only a driver's licence for smaller amounts.
- Low Doc: Requires two years of bank statements.
- Full Doc: Requires up to two years of financial statements.
Which application you qualify for depends on factors such as the length of time your business has been operating or your GST registration status.
How Truck Finance Can Help Your Business Grow
Investing in additional trucks through finance can significantly boost your business's earning potential. By utilising a chattel mortgage, where the truck itself acts as collateral, you can have your new vehicle on the road sooner, increasing your capacity and revenue.
Scenario 1
Ryan, who owns Trucking Pty Ltd, currently operates one truck and turns over around $30,000 monthly. His client, Linfox, offers him additional work that could double his income if he acquires a second truck. However, his current financials don't support a new loan. After consulting with Inovayt, Ryan is approved for truck finance based on a work source letter from Linfox and cash flow forecasts, allowing him to grow his business by adding a second vehicle.
Scenario 2
Imagine you own a long-haul transport business with one truck, generating $30,000 a month. By financing a second truck, you could still increase your monthly profit by $9,000 even after accounting for loan repayments and driver salaries. This strategy illustrates how truck finance can help expand your business and increase profitability.
Types of Trucks You Can Finance
Whether you're looking to finance a new or used truck, Inovayt's expert asset finance brokers can help. New trucks offer the advantage of longer warranties and the latest technology, while second-hand trucks are more affordable and have already depreciated, saving you on upfront costs.
The Role of a Truck Finance Broker
A truck finance broker specialises in securing the best possible finance deals for truck owners and operators. From negotiating interest rates to finding the right financing structure, a broker can simplify the process and ensure you get the best terms. Brokers can also assist with alternative financing options for those with credit challenges, helping you keep your business competitive.
If you're ready to take the next step in growing your business with a guide to truck finance, reach out to Inovayt's team of specialist brokers today. They can also assist with caravan loans, guide you to the right finance investment advisor, and help with vehicle and equipment finance to suit your needs.
