Truck Finance: Growing Your Long-Haul Transport Business

Truck Finance: Growing Your Long-Haul Transport Business

Long-haul transport is crucial in moving goods between major cities over distances above 400km. The latest statistics show that metropolitan freight movement in Australia is forecast to grow by nearly 60 per cent over 20 years to 2040. This means it’s time for business owners in this sector to start investing in truck finance to grow their businesses and meet the upcoming demand. So, what does truck finance involve, and what are the benefits to your business? Read on to find out more.

What is truck finance?

[embed]https://youtu.be/F-QL0up7V9Y[/embed] Truck finance refers to a type of asset loan used to finance a heavy vehicle purchase and spread the upfront costs of purchasing the vehicle over time. This allows business owners to purchase assets needed to help their company grow without paying the total amount upfront. Business owners have the option to use either of the following when it comes to gaining finance for a chattel mortgage:

• No doc – only requires a driver's license up to a certain amount.
• Low doc – requires two years of bank statements.
• Full doc – requires up to two years of financial statements.

Which financial application your business is eligible for depends on factors such as how long you’ve been in business, length of ABN and GST registration, etc.  

How can I use truck finance to help my long-haul transport business grow?

It’s true what they say – sometimes you have to spend money to make money. Investing in your business is one of the best ways to increase company growth. With a chattel mortgage, you can have your next truck on the road – bringing in extra income - sooner. A chattel mortgage uses the asset being purchased as collateral for the loan. So, in this instance, the truck you are buying will act as loan security. When we hear the word “mortgage”, our minds often go straight to a property mortgage. However, a chattel mortgage is only for moveable equipment (such as vehicles or factory machinery) or anything with a serial number.  

What type of truck can I finance? 

Our team of specialist asset finance brokers are equipped with expert knowledge to get your new truck sooner. Whether you’re after a second-hand truck or are eyeing the latest model, Inovayt knows how to get you what you’re after. Regardless of which option you’re after, there are plenty of benefits to both. While newer trucks are popular for those looking for an upgrade, there are some quality second-hand trucks that businesses can finance for less.   If you’re still unsure about whether you’d prefer new or second-hand, here are some of the benefits of each:

New trucks:

• Are at the beginning of their lifecycle.
• Often have longer warranty periods.
• Gives you access to some of the newest technologies. 

Second-hand trucks:

• Are often cheaper to purchase.
• Have already gone through their main depreciation period.
• No dealer fees.

Whether you’re looking to finance a new or second-hand truck, our Inovayt asset finance brokers have the experience to get you your new asset sooner. We can assist with private or dealership sales and can help your business with budget projections and forecasting for the future.  

What is a truck finance broker?

A truck finance broker is a professional who specialises in helping truck owners and operators secure financing for their vehicles. They act as an intermediary between the borrower and the lender, providing a range of options for truck financing and working to secure the best possible deal for their client. This can include everything from negotiating interest rates and loan terms to securing the right financing structure to meet the unique needs of the truck owner or operator. Truck finance brokers have extensive knowledge of the truck finance industry and can help clients navigate the complex world of lending, making sure they are getting the best possible terms and conditions. They can also help clients with credit issues to find alternative financing options, such as leasing, rental, or rent-to-own arrangements. Truck finance brokers play an important role in helping truck owners and operators stay competitive in the market. They can help secure financing for new or used vehicles, as well as financing for fleet expansions, upgrades, and maintenance. They can also help truck owners and operators manage their cash flow, giving them the flexibility to make important investments in their businesses without sacrificing their bottom line.  

Talking truck finance with Daniel Trajkoski

Truck finance is one of Daniel Trajkoski’s - Inovayt Senior Asset Finance Broker Melbourne – specialties. He has worked with a range of clients in the long-haul transportation industry to successfully grow their businesses through asset finance. Daniel says, “Transport companies (along with infrastructure companies) are some of the top-performing clients in today’s market. They’re great businesses to get off the ground, with simple business models and high earning potential.”   The following scenario* is one example of truck finance and how it can help long-haul transport businesses positively grow their earnings. *Please note that this scenario is just an example and is not based on someone’s personal experience.  

Scenario #1:

• Ryan owns a transport company, Trucking Pty Ltd, which has been running for two years.
• He currently has one big prime mover, and he subcontracts to Linfox, carrying the freight to Coles and Woolworths.
• Ryan currently turns over around $30,000 per month with his one truck.
• Linfox has told Ryan that he can get more freight runs if he gets a second truck and driver on board.
• They have also said that they will pay Ryan an extra $30,000 for the additional truck.
• Ryan’s financials don’t currently have enough income to warrant another truck finance facility, so he comes along to Inovayt to talk to Daniel about his options.
• We’re able to get Ryan approved based on a work source letter from Linfox and cashflow forecasts which will show servicing to the lender.

These types of scenarios are common at Inovayt. Daniel says, “These kinds of facilities are what I call an earnings accretive lend, where the facility improves the client’s earning power.”  

Scenario #2:

When it comes to growing your business, truck finance is a great way to increase your income. Daniel shared another common scenario with us below: “Imagine you have a long-haul transport business. If you have one truck, you’re earning one income. If you’ve got two trucks, two income streams are coming through. Let’s say one truck is earning $30,000 a month, and you’re driving it. You can get another truck that makes you $30,000 a month, and you can employ someone else to drive it. “So, if you make $30,000 a month and purchase a truck that costs you $15,000 a month, as well as paying a driver $6,000 a month, you’re making an extra $9,000 per month. Your business grows based on the number of trucks you have.”   In both above scenarios, financing a truck can help you to grow your business significantly. The long-haul transport industry is one that is constantly growing, and there will always be a demand for this type of work. Growing your business is a situation that our team of expert brokers work with regularly.   If you’re ready to start a new business or grow your long-haul transport business through truck finance, reach out to one of our asset finance brokers today.