Truck Loans

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


When you lease a truck, you pay 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 lease 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 if you want.

Chattel mortgage

A chattel mortgage is another option for financing a new business truck. It involves a lender providing you with a loan that is secured against the vehicle via a mortgage. Chattel mortgage interest and fees on a business vehicle are tax-deductible against business income.

However, it’s important to understand that like any secured loan, the lender can repossess a vehicle under a chattel mortgage arrangement if you default on your regular loan repayments. When you have repaid the loan in full, the lender releases the mortgage.

Hire purchase

A hire purchase agreement for a business truck involves you hiring it from the lender for an agreed term. When you make your last hire payment, the ownership of the vehicle transfers to your business.

Key truck loan considerations

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

  • interest 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),
  • and 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 track that will:

  • be cost-effective to run and maintain,
  • be safe to drive,
  • reflect your desired business image, and
  • 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.

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 truck-financing options 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 a truck-financing option can make a big difference to your repayments and to your business’ cash flow.

At ARG Finance, our experienced team of truck finance brokers can help you to find the right option. We’ll take the time to understand your business’ needs, goals and financial circumstances before recommending an appropriate lender and truck-financing option for you.

Contact us today to find out how we can help your business with truck financing

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