Trailers, trucks or any other type of commercial vehicles represent significant business assets that are necessary for your daily business operations. In the position of a business owner, you always deal with a range of critical decisions that will influence the wellbeing of your company.
One of them is finding the right financing for your business.
This is, most of the time, the only alternative you have, but it requires a lot of in-depth thinking and research. In short, you should evaluate your needs and choose a vehicle that will meet them, and compare distinct financing options such as commercial truck loan, finance lease, commercial hire purchase, and others.
These are some of the stats that characterise the present situation in Australia.
- According to the Truck Industry Council, the sales for Australian trucks increased by 4.5 percent in 2015.
- Based on official data, freight vehicles represent 19.1 percent of the total of registered vehicles.
- At the moment, the road freight transport industry represents no less than 80 percent of the total revenue derived from the Australian transportation industry.
What type of truck do you need?
To begin with, you should establish whether you need a new or used vehicle. What is more, you should choose between buying from a dealer, private seller or auction.
Selecting the right truck is very important for your business’ success, and it’s perfectly understandable if you want what’s best for your business. Either way, you should ensure that the loan is, indeed, what you need, and whether you can make timely repayments or not.
Always choose a financing option that fits your present situation.
What types of truck financing are there?
This alternative enables your companies to benefit from utilising the commercial vehicle. In short, you can enjoy the advantages linked to ownership, while the financier is, in fact, the owner. In other words, the lender buys the vehicle on your behalf and decides to lease it to you.
Your responsibility is to make monthly payments until the lease term expires. At that time, you can choose to pay off the remaining value of the vehicle and enjoy full ownership of the truck, refinance the lease or trade the car in.
Commercial hire purchase
This financial arrangement implies that your business hires a vehicle from a financier on an agreed timeframe. During this period, you are scheduled to make fixed monthly repayments.
Even though your business doesn’t own the vehicle during this timeframe, you’ll obtain ownership rights after the term is up and you’ve paid the total price together with interest charges.
Personal loans are also viable alternatives that are worth considering. You can use such a loan for whichever purpose, including purchasing a vehicle for your business. We would recommend you to consider this as your final option, however, since personal loans tend to present high-interest rates and additional fees when compared with other options.
The bottom-line? Always evaluate the terms associated with every loan alternative. If possible, we would advise you to discuss this matter with your financial advisor, to get the opinion of an expert on the matter. At the end of the day, your business’ interest is the primary focus! Are you in need of truck financing at the moment? Would you consider adding something to our list? Let us know!