Business Vehicle Finance

For a variety of reasons, the addition of a business vehicle to your fleet is a great decision. However, whether it is a company car, UTE, motorcycle, or work van, it can cause some financial challenge for you. Luckily, for you, this financial challenge does not have to pull you down. You can now obtain business vehicle finance to fund the purchase of your business vehicles.

What Is Business Vehicle Finance?

This is a financial arrangement that allows you to purchase your business vehicle without worrying about paying the total cost of the purchase at once. With this option, you get a lender who makes the funds available to you. In return, you agree to refund the purchase price with an interest payment over a period.

Who Offers Business Vehicle Finance?

Typically, you can get a business vehicle finance from either a bank or non-bank lenders. You can also apply through specialist finance companies or a car dealer. 

Typically, a bank is the best option for lower interest rates. However, you will need to exercise more patience as it takes a while to get it done. As such, a finance broker is typically your best bet.

How Does It Work?

Getting a business vehicle finance is not all hard. You can easily obtain a business vehicle finance through the following process.

Application

The first step is to contact a lender and show your interest in getting financing for the purchase of a business vehicle. You will also need to provide various documents, such as:

  • Business financial statements prepared by an accountant 
  • Business bank statements 
  • Proof of identity
  • Information about the vehicle you want to purchase 

Processing

At this stage, your lender processes your application to determine if you qualify for the loan. Afterwards, if you qualify, you move to the next stage. Typically, for you to qualify, you will need to meet certain minimum requirements. They include:

  • A GST and ABN Registration 
  • A certain level of turnover
  • An acceptable credit score
  • An acceptable level of maximum debt

Contract

Here, you enter a formal contract that seals the whole agreement. You then get access to the finance sum while you commit to making regular repayment.

Available Finance Option

Business vehicle finance is a type of equipment finance. As such, they share the same financing option. Typically, you can finance the purchase of your business vehicle through any of the following options.

  • Chattel Mortgage 
  • Commercial Hire Purchase 
  • Finance Lease
  • Rental (Short Term and Long Term)
  • Novated Lease
  • Operating Lease
  • Sales Hire Back 

Business Vehicle Finance Borrowing Calculator 

This is a finance tool that allows you to determine how much you can borrow based on the amount you intend to pay back each month. For you to use this tool, you will need to provide an affordable monthly repayment, the loan duration, the loan frequency, and the interest rate. Once, you click calculate. Then, it provides an estimate of how much you can borrow.

Business Vehicle Finance Repayment Calculator 

This is a tool that allows you to determine how much you will need to repay each month when you decide to go for a business vehicle finance. This tool provides an estimate rather than an exact amount. For you to use this tool, you will need to provide the loan amount, the loan duration, the loan frequency, and the interest rate. Once, you click calculate, then, it provides the estimate.

Frequently Asked Questions About Business Vehicle Finance 

How Much Can You Borrow?

You can borrow as much as 100% of the cost of the business vehicle. You can then borrow as much as 50% for other cash-flow purposes of your business with certain lenders. However, in some cases, the amount you can borrow will depend on the vehicle’s valuation.

Can I Get A Low Doc Loan for My Business Vehicle Finance? 

Yes, you can get a low doc loan. With this loan option, you will not need to submit any proof of your financial position. What you need to submit is little documentation that reflects your business tenure over a short while, for instance, 90 days.

Can I Get Business Vehicle Finance with A Bad Credit?

Yes, the fact that you have bad credit does not stop you from obtaining a business vehicle finance. Various lenders offer business vehicle financing to businesses with bad credit. However, you might need to pay a higher interest rate and be unable to borrow up to an amount.

How Much Will I Pay as Interest Rate?

The amount you will pay as interest depends on a wide range of factors like your lender, credit score, the vehicle valuation, and the vehicle type. Regardless, you can get an interest rate for as low as 3.65% if you meet all necessary conditions.