Get to know what finance options are out there
Carefully considering ways in which to finance your truck business is vital. It also helps to know what options are available to you. Leasing a truck can be financially viable for truck businesses that are looking for a finance option that allows them to constantly upgrade their trucks without affecting their cash flow. It also means that you can keep the cost of maintenance and repairs off your books.
There are generally two products for business owners who are looking to purchase their trucks outright. Chattel mortgage is a loan that you can use to purchase a truck. It comes with potential tax benefits such as being able to claim GST, interest on payments, and the fuel input tax credit. Then you have hire purchase is almost similar to chattel mortgage. The only difference is that your lender owns the vehicle until you have paid off the vehicle. Check to see which ones will let you own the truck outright and which ones won't. Remember to compare loan features to find one that will offer you the flexibility that will be suitable for your finances.
Find finance that works with your business needs
Australian businesses borrowed $43,928 million in commercial loans. Keeping your truck in mint condition is important for most businesses. 87% of business owners also look at the cost of maintenance of a truck before purchasing it. However, it is imperative to ask yourself important questions such as:
- Whether you are planning on expanding
- What loan term will be suitable to adequately cover your expenses
- Are you operating seasonally?
- How often will you need to replace your truck?
- Will you need the flexibility to keep up with the latest truck?
This can help you narrow down your search for financing that will help you meet your business's needs without overextending your budget.
Financial flexibility
Checking your finance option for flexibility can ensure that you don’t bite off more than you can chew. This means comparing financing that will be able to help you maximise your cash flow. Features such as being able to trade in your truck at the end of a lease can come in handy for some businesses, while other options offer you appetising tax benefits for your business. The payment plan on your loan is also important. Speaking to a financier can help you find a loan that is tailor-made to fit your needs. This can definitely be a suitable feature for businesses that operate seasonally.