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A Comprehensive Guide To Truck Finance Options

 


Business owners can avail of convenient financing options while buying vehicles for commercial use. Business vehicle finance can help a firm fund its vehicle purchase without taking money out of the business. If you have plans to buy a new truck for business purposes, truck finance options can come to your rescue. There are different types of truck finance agreements to choose from. Let's break down the top truck financing options available for Australian business owners. 

Truck Financing: What Does it Mean?

Truck financing instruments allow business owners to take loans to buy trucks for business operations. The borrower can purchase new or used trucks with the loan amount, repaying the same with interest over a stipulated period. In most cases, the purchased truck functions as collateral for your business vehicle loan.

A truck loan allows you to buy various types of commercial trucks. Some of the most common trucks purchased with truck finance solutions include:

●      Tipper trucks

●      Pantech trucks

●      Refrigerated trucks

●      Service body trucks

●      Crane trucks

●      Cab chassis

●      Prime movers 

Three Types of Truck Finance Solutions

You can choose a truck finance option that suits your business requirements. Australian lenders offer three types of truck finance. Here is what you need to know about these three options:

1.     Chattel Mortgage: This option allows you to borrow funds to buy a truck that acts  as collateral. The lender can provide up to 100% of the purchase price, enabling you to buy the truck with zero down payment. The borrower can buy any eligible truck, ensuring that they use the vehicle for business purposes at least half the time. Since the truck is the collateral, you do not need to submit any other asset to secure the loan. If you default on repayments, the lender may sell the truck to recover the money.

2.     Hire Purchase Agreement: This agreement allows a business owner to purchase a truck without availing of ownership rights till they repay the loan. In essence, they borrow the truck from the lender until they pay the last instalment. Once the loan is repaid, the lender transfers the truck's ownership rights to the borrower. Hire purchase agreements can provide flexible loan terms. For example, some lenders allow borrowers to submit a deposit to minimise the interest charges.

3.     Equipment Lease: This option allows a business owner to lease a truck by paying a stipulated sum across regular intervals. They can use the equipment for business purposes as long as they make timely lease payments. Once the lease period ends, the business owner can leverage the option of buying the vehicle or taking a new lease. This financing option enables business owners to use commercial vehicles without incurring long-term investments. 

Such business vehicle finance options are commonly used by sole proprietors and small enterprise owners. The terms of the loans can vary based on factors like the truck's condition, the borrower's business stability and the firm's credit history, etc. You can contact the Broc Finance team to find suitable truck finance options that suit your requirements! 

Source: https://www.brocfinance.com.au/blog/a-comprehensive-guide-to-truck-finance-options/


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