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Truck Loan Finance

Trucks are essential assets for many businesses. If you need truck finance to buy a truck for your business, your options for truck loans in Melbourne include:

LEASING

When you lease a truck, you will make monthly payments to a lender who retains ownership of the vehicle. You have full use of the truck for the duration of your lease. These payments will usually be tax-deductible. When the lease term ends, you usually have an option to pay an additional amount to buy the truck. Alternatively, you can hand it back to the lender and lease a newer model truck. Leasing can be an attractive option for businesses that want to maintain a modern fleet without the upfront costs of purchasing commercial trucks.

CHATTEL MORTGAGE

HIRE PURCHASE

KEY TRUCK LOAN CONSIDERATIONS

The right truck or trailer finance option will depend on your individual business needs and financial situation. Key considerations include:

  • truck finance rates, fees and other finance terms and conditions
  • repayment flexibility to suit your business’ cash flow,
  • the tax-deductibility of repayments,
  • the finance term (shorter loan terms result in higher regular repayments, while longer terms have lower regular repayments, but you pay more interest),
  • whether you want new truck finance or used truck finance
  • whether it’s better to own or lease your vehicle. For example, leasing your truck may allow you to upgrade more easily when the lease term expires.

KEY TRUCK-BUYING CONSIDERATIONS

Buying a truck is a big investment. In addition to your financial considerations, it’s important to buy a truck that will:

  • be cost-effective to run and maintain,
  • be safe to drive,
  • reflect your desired business image
  • suit your business’ needs (for example, your truck buying options include prime movers, tilt-tray and refrigerated trucks, just to name a few).

What is a residual (balloon) payment?

A residual (balloon) payment is a way that you can reduce your truck loan repayments during your finance term, in return for making a single larger (balloon) payment at the end of the term.

For example, if you borrow $100,000 for a new truck via a five-year chattel mortgage, you could arrange to pay $80,000 over five years with regular monthly repayments, and a single $20,000 residual (balloon payment) at the end of the five-year term.

However, if you structure your repayments like this, it’s important that you structure your business finances to ensure that you can afford the final residual (balloon) payment amount. Failing to plan for this final payment could put your business under financial strain, so it’s crucial to work with a knowledgeable truck finance broker who can help you make informed decisions.
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How we can help

Truck financing is an important decision for many businesses, especially if you need a fleet of them. It’s important to understand the pros and cons of different commercial truck loans so that you can choose the most appropriate one for your business.

It’s also important to understand that even a small difference in the terms and conditions of truck loans for business purposes can make a big difference to your repayments and your business’ cash flow.

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