Business Vehicle Finance

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Business vehicle loans in Australia

Getting a loan for a business vehicle has never been easier. With a wide variety of auto loan options available in Australia, you’re guaranteed to find the perfect finance solution for your business.

Commercial vehicle finance is a loan used to acquire a vehicle, usually to buy or lease. While business car loans are the most common kind of vehicle finance, you can also purchase other vehicles such as trucks, trailers, buses, and other business equipment.

Learn more: equipment loans

What are the different business vehicle finance options?

There are a number of business automobile loan options in Australia. Below are some common business finance options:

• Goods loan (chattel mortgage) – a standard car or vehicle loan option where the vehicle you purchase is used as security for the loan. You receive the total amount needed for the vehicle upfront and pay off the loan over a set period of time.
• Lease – you can get a loan to lease a vehicle or fleet of vehicles for your business. Some businesses elect to pay the remaining money for the vehicles and take ownership at the end of the lease. Others prefer to return the vehicles and take out a new lease or purchase new vehicles.
• Hire purchase – often you will pay a deposit for a new or used vehicle and pay off the remaining balance in instalments. Once you make the final payment you take ownership of the vehicle.
• Low doc business vehicle loan – a low doc business loan is an option that can suit businesses that don’t have the usual paperwork required for a loan application. They involve less paperwork but can also come with higher interest rates.
• Unsecured business loan – you don’t use any asset or collateral for the loan. These loans tend to come with higher interest rates due to the increased potential risk to the lender.

Best business vehicle finance

The best vehicle finance option for you will depend on your unique business circumstances. You should carefully consider your business requirements before deciding on a loan.

Compare business vehicle finance rates and fees

Your business car interest rate will depend on the lender and loan you choose to go with. Here are some of the fees you should compare when reviewing your finance options:

• Establishment fee
• Ongoing fees
• Late or missed payment fee
• Early repayment fee

There are different types of vehicle finance to suit different products and situations. For example, some people find having a balloon payment at the end of their loan suits them more than the usual repayment setup. This means that they pay less in repayments and make a large payment at the end of the loan to cover the remaining cost.

How does business car finance work?

Here’s the general process for getting business vehicle finance:

• Check your credit rating – you can find where to get a free credit history report here. This is important to know before you begin as it will impact eligibility, borrowing power and interest rates. Some lenders will look at your personal credit score as well as the credit score for your business.
• Review business loan lenders and options – there are many banks and private lenders in Australia that offer business vehicle loans. Compare interest rates and fees, terms and conditions, and borrowing limits.
• Decide on a lender – review your options and eligibility requirements carefully before you make your decision.
• Submit your loan application – most major banks and private lenders will have an online application available. Be aware that business loans tend to come with a lot of paperwork.

How to get approved for business vehicle finance

Getting approved for a business loan can be a bit more tricky than a personal loan. The process takes longer, but you generally have a lot more borrowing power.

Increase your chances of success with a broker

One of the ways to increase your likelihood of approval is with the help of a loan broker. Instead of trying to manage the loan discovery and review process yourself, you can use the expert skills of a vehicle finance broker. Once you’ve discussed what you’re looking for, they’ll assess your financial situation and needs. And after reviewing your options, your broker will suggest the finance options that best align with your needs and circumstances. No more worrying about the small print, a broker can take care of that for you, so you know you’re getting exactly what you’re looking for.

Paying the one-off brokerage fee can be an easy way to ensure your loan journey is smooth from start to finish.

Requirements for business vehicle finance

Requirements and eligibility for business finance will differ depending on the lender. But at a minimum, you will need:

• Your ABN or ACN
• Personal identification
• Business verification
• Information on the vehicle you intend to purchase