Commercial trucking equipment can be an extremely costly yet vital component of many businesses. Whether you are in need of dump, long haul or other trucks, you may find that truck loans can be challenging.
Understand the Basics:
While you may consider truck finance to be simply another form of loan, this is an oversimplification. It is vital to have an understanding of the basics of truck loans and other finance options to not only improve your chances of approval but obtain the best deals.
The most important aspect of truck finance, Melbourne business owners should be aware of is the credit criteria. Most finance companies have their own set of truck loan criteria to determine whether the loan will be satisfied in a timely manner. Generally, this includes factors such as how long the company has been established and if the business has a strong financial history. It is a good idea to prepare your financial records before applying for any type of truck finance. You are likely to need to present income and tax documentation including a history of your profits, which will demonstrate that you are a low credit risk for the lender. Other considerations for the lender include the type of truck finance requested and the exact equipment you wish to finance.
Assess Affordability:
Of course, the lender will assess your financial information to determine the level of risk. However, you should be aware that many finance companies look less favourably on applications for longer loans. The reason for this is that a longer term loan tends to present a greater risk for the lender. Therefore, it is well worth assessing your capital and income to determine if the business can afford to finance larger equipment on a shorter loan. Although this will increase the cost of the repayments, it is more likely that you will obtain approval and you are likely to save a great deal on interest payments over the full term.
Choose a Specialist:
In these challenging economic times, you are unlikely to receive approval for truck finance from any lender. High street lenders and other generic finance companies are not particularly familiar with the costs and benefits of this type of equipment, so it can be difficult to obtain approval. Therefore, it is a good idea to look for a specialist in truck loans and finance. Specialist companies are familiar with the industry and are able to more accurately assess loan risks. This typically results in lower rates and specific support such as lists of brands and equipment which are supported, for ease of application. It may also increase your chances of approval by choosing a pre-owned truck or less expensive model. This will enable you to borrow less and pay it off more quickly, further improving your credit history and relationship with the lender.
If you are in need of truck finance, contact us. We are a specialist broker with access to a wide selection of lenders offering truck loans and commercial finance. Our team of advisors would be delighted to assist you in obtaining the best deals.
