Truck & Trailer Finance for Owner-Drivers and Small Fleets

Most truck loans for an ABN holder are written as a chattel mortgage. You own the truck from the day it is delivered, the lender registers its interest over it as security, and when the final payment clears the security comes off. Because the truck is yours, depreciation and the interest charge may be claimable. Whether that helps your setup is a question for your accountant. We arrange the finance, we do not give tax advice.

Balloons are normal on trucks. Instead of paying the loan down to nil, you leave a lump sum owing at the end of the term. The regular repayment drops, which helps while you are building up a run or waiting on 30 and 60 day payers. When the term ends you pay the balloon out, refinance it, or trade the truck and roll into the next one.

The honest version is that a balloon moves money rather than saving it. You pay interest on that amount for the whole term, and it has to be dealt with on the day. Two things to weigh before you set one:

• Will the truck still be worth the balloon? A five-year term on a truck that is already ten years old leaves you refinancing a fifteen-year-old asset. Lenders apply the same age rules to that refinance, so the pool of lenders then may be smaller than it is today.
• Does the balloon match how you replace trucks? If you trade every four or five years, a balloon that lines up with the trade is sensible. If you plan to run the truck until it is finished, paying it to nil is usually cleaner.

Rental and operating lease structures also suit operators who swap units on a set cycle, though you do not end up owning the truck.

Trucks work for longer than cars and lenders know it, so heavy vehicle age limits are more generous than they are on a passenger car. The rule that matters is almost always the age at the end of the term, not the age today. Work it backwards: take the build year, add the term you want, and that is the number the credit team sees. A seven-year term is often what pushes an otherwise simple deal outside policy.

Beyond age, these are the things that come up most:

• Kilometres and hours. A prime mover with high kilometres is read differently to a rigid that has only done suburban work. Tippers, and anything running a PTO or a crane, may be assessed on hours as well as distance.
• Service history. Full records on a used truck help. Patchy records do not kill a deal, but expect an inspection or a valuation.
• What the truck actually is. Mainstream prime movers and rigids are easy to value. Specialised or one-off units, heavily modified trucks and anything only a few buyers would want are harder, because the lender is lending against resale.
• Trailers on their own. Trailers are financeable, and some lenders prefer to write them alongside the prime mover. Older trailers narrow the field faster than older trucks do.

Any one of these can be the difference between a bank saying no and a specialist financier saying yes. That is the point of a broad panel. The deal does not change, the credit appetite does. Every approval is still subject to lender criteria and credit assessment.

Lenders split truck applications roughly three ways, and knowing which one you are in saves a lot of time.

• Full doc. Two years of tax returns and financial statements, sometimes with an interim profit and loss. This is where the widest set of lenders and the most flexible structures sit.
• Low doc. No returns. The lender leans on ABN and GST registration history, the deposit, and whether you own property. Applicants who own real estate generally see a wider panel than applicants who do not.
• New ABN. Registered weeks or months rather than years. Harder, not impossible. What helps: time in the industry working for someone else, a deposit, a signed contract or rate confirmation from the firm giving you the work, and a clean credit file.

Two other things lenders look for on a first truck. The first is comparable credit, meaning a loan of a similar size that you have paid on time. If you have never borrowed this much before, some lenders will want a deposit or a guarantor instead. The second is that your licence class and experience match the truck you are buying, which matters most on heavy combinations.

If your financials are behind, say so at the start. We would rather structure around it than lodge an application that was never going to fit and use up a credit enquiry doing it. Our low doc business finance page goes further on this, and if you also need a ute or a car in the business, see self-employed car loans.

A dealer purchase is the simplest path: a tax invoice, a verified bank account and the lender pays the dealer. Private sales are common on used trucks and most of our lenders will do them, with a few more steps.

• PPSR. We check the truck for existing finance. If the seller still owes money on it, the lender pays that out first and the balance goes to the seller.
• Proof of ownership and identity. Registration papers in the seller's name, and bank details verified before any money moves. That protects you as much as the lender.
• Inspection or valuation. Expect one on an older truck or a larger amount.
• Roadworthy and registration. Requirements differ by state and by vehicle class, so check what applies before you agree on a handover date.

Comprehensive insurance over the truck has to be in place before settlement, with the financier noted on the policy. If the truck is being bodied, fitted with a crane or a tailgate loader, or painted, tell us up front. Work that sits on the one invoice is usually straightforward, and gear added afterwards may need to be itemised or financed separately.

There is no single figure. Lenders look at what the truck is worth, what the business earns, what it already owes and your credit file. In practice the first question is rarely the amount. It is whether the repayment fits the work the truck is going to do, with something left over for tyres, servicing and the quiet weeks.

Deposits. Plenty of truck deals are written with no deposit when the application is strong. A deposit starts to matter on a new ABN, an older truck, a private sale or a specialised unit, because it lowers the lender's exposure if the truck has to be sold.

Trade-ins. A trade can stand in for a deposit. If the truck you are trading still has finance on it, the payout figure comes out of the trade value first, and anything left owing has to be dealt with inside the new deal rather than ignored.

GST. On a chattel mortgage the loan can be written on the GST-inclusive price, or you can pay the GST yourself and finance the rest. Which is better depends on your BAS cycle and cash flow, so that is a conversation with your accountant.

One more thing worth knowing. A truck bought for business use is usually written as a commercial contract rather than regulated consumer credit, which means the disclosure and the protections are different. We will tell you which basis your loan is being written on before you sign.

You do not need all of this to enquire. Have it ready for the application and there is far less back and forth.

• ABN and GST details. Plus the entity name and whether it is a sole trader, company or trust.
• Driver licence. Front and back, for every director or guarantor.
• The truck. The dealer invoice, or the listing and the seller's details on a private sale.
• Business bank statements. Usually six months for the trading account.
• Financials, if you have them. The last tax return and financial statements open up the full panel.
• Work on the books. Contracts, rate confirmations or a schedule of work. This carries real weight on a first truck.