Vehicles

The Top 4 Benefits of Financing Trucks for Your Business

Business trucks are expensive. Financing trucks is a great way to save money upfront. In many cases, business owners might be forced to hire independent trucking companies to deliver their goods due to the high cost associated with purchasing a truck or fleet of trucks for their business.

While outsourcing certain business needs to independent trucking companies might make sense in some cases, purchasing your own truck can help you to reduce costs and increase your long term profitability. The gross total wages and salaries of all employees in the Australian trucking industry was $13.6 billion AUD last year alone and the Truck Industry Council estimates that in 2014 over 30,800 trucks were sold in Australia. While that figure is still down from the all-time highs of 2007-2008, it certainly shows that the trucking industry is a solid part of the Australian economy.

If you are the owner of a small to medium-sized business and are would like to purchase your own truck to facilitate your business operations, below we look at four benefits that come with financing trucks for your business.

Financing is Increasingly Easy to Find

Finding small business loans has always been difficult, especially with the major banks. Truck loans are certainly no exception to that rule. While banks are increasingly reluctant to give out start-up loans, they might also require extensive documentation to finance a truck for even an established business that has a proven, profitable business plan and model.

Fortunately, banks are no longer the only way to apply for a loan for your business. With a bit of research, you should be able to find several online lenders that offer competitive finance rates for all types of business loans, including for the financing of company trucks and vehicles. Ebroker is one helpful website that allows you to quickly and efficiently research and compare hundreds of unsecured business loan offers and even truck finance brokers from over 60 non-bank business lenders.

Equipment Finance is growing in Popularity

While you might not consider a truck a piece of equipment, it can certainly be a necessary “tool” needed to help expedite the efficiency of running your business. Equipment finance is a booming industry in Australia to the tune of 42.1 billion dollars annually and trucks and busses account for more than 17 percent of this total. These statistics show that the sheer volume of equipment finance in the Australian market should make it relatively easy to apply for a loan to purchase new or used trucks for your company. Similarly, financing business cars is also a huge business as upwards of 40 percent of the 42 billion dollar equipment finance industry is related to business cars and light commercial vehicles.

Truck Finance can be Tax Deductible

Another major benefit of truck finance is that the purchase of a truck for your company can be a tax deductible expense. Even if you choose to go the route of purchasing a rent to own truck, Australian tax law will allow you to deduct 100 percent of the lease payment each month. The truck will have to be used for solely business purposes, however, thus once again proving that it is almost always preferable to keep your business expenses separate from your personal finances. Rent to own trucks might also make more sense financially as it can lower your monthly payment and thus help businesses that are in a financial tight spot.

Different Types of Lending Options

While leasing to own is one type of finance instrument, there are other types of finance instruments to help your business purchase a truck. Chattel mortgage is essentially a type of loan wherein the bank or lender places a mortgage on your truck that is lifted once it is paid off. Usually, this allows for lower interest rates. A hire purchase is different in that the bank or lender actually owns the vehicle until you pay it off. The wide variety of lending instruments allow business owners to find the best option for their particular situation.

Using an online truck finance calculator or a truck loan calculator is another easy way to help you plan your investment so that you can enjoy the financial benefits of owning your own company truck while not putting your business into a difficult financial situation.

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