3 Things to Consider Before You Apply for Truck Finance

When it comes to commercial truck finance, Perth business owners tend to find the application process a little long winded and frustrating. While truck finance is a bit more complex compared to a standard personal car loan, it need not be complex. In fact, you can expedite the process by considering these three things before you apply.

How Much You Need:

Before you get into discussions with a lender, you need to have an estimate of how much you actually need prepared. Commercial lenders tend not to look favourably on applicants who take an “I’ll take what I can get” approach to their loan. It is also a good idea to prepare some calculations on the length of the loan and your proposed repayment options. How much you need will depend on your financials, but will also depend greatly on what truck you want to purchase. It is well worth taking a little time to conduct some research. If you can have an exact model in mind, the lender will be more equipped to determine the business outcome.

Your Cash Flow Forecast:

Most commercial lenders will use an assessment of your cash flow as a predominant factor for approval. If you have been in business for more than a couple of years, you will be able to use financial statements as a true indication of your cash flow. These will usually be sufficient to obtain formal approval. Unfortunately, in certain scenarios, financial statements may not offer a true indication of the current or future cash flow. In these cases, you will need to prepare a comprehensive cash flow statement. This can provide potential lenders with the information necessary to make an informed decision about your borrowing capacity. It is a good idea to have your cash flow forecast prepared by a professional accountant to have credibility with any lenders.

Assets and Security:

When evaluating your business finances, the lender will need to consider any assets and liabilities of your company. It is a good idea to prepare an Asset and Liabilities statement in advance. This should detail all your current obligations including current repayments and investments. When you are calculating your assets, this is also the opportune time to assess what security you could offer. In most cases, the lender will use the truck itself for security on the loan. However, if you are a relatively new business or may have difficulty proving your financial position, you may need to offer additional security. In most cases personal property, including your personal home cannot act as security for a commercial transaction, so you will need to consider business assets.

There are several different options available for truck finance. Australia business owners will need to determine which loan best suits their needs. However, when you have made these preparations in advance, you will be better prepared to assess which finance package is most applicable.

If you are considering truck finance, Perth business owners should speak to us. At All Credit, we have access to a diverse range of lenders including those specialising in commercial truck finance. Our team are here to discuss your requirements and help you to find the best deal.