4 Options for Low Doc Truck and Heavy Vehicle Finance - Heavy Vehicle Finance Australia
4 Options for Low Doc Truck and Heavy Vehicle Finance

As seen in previous articles on our site, there are many different factors that impact on truck finance and heavy equipment finance. The world of low doc lending even further complicates this process. Below is list of different low doc funding options available to customers of Heavy Vehicle Finance.

Option One – Replacement Finance

This option is available when a client is purchasing a new item of equipment that will replace an existing item – i.e. trading in current truck for a new one.

What are the requirements under Replacement Policy?

Income Statement for Truck FinanceFinance Amount to not exceed $500K

Amount being financed does not exceed 125% of the previous loan amount

Monthly payments to increase no more the 25% of the previous monthly payment

Good payment history on existing loan contract for at least 12 months

Goods being purchased to be through a dealer (no private sales)

No adverse credit for applicant

Features

Quick turnaround times

Good base interest rate offered to client

No inspections required on the items of equipment being purchased

Minimal paperwork required in order to complete settlement

Very easy and simple process for the client

Online finance approval available

Option Two – No Financials Available

This option is taken up by clients when they need to move on the purchase of a particular item of equipment even though their accountant has not prepared financial statements for their business.

What are the requirements under No Financials?

Amount financed not to exceed $500K

Applicant to have equity in property

Client to have good payment history on an existing loan contract for 12 months

Copy of last business activity statement to be provided

Copy of current tax portals to be provided (on both integrated client account and income tax account)

5-year maximum loan term with goods to be no older than 8 years old at end of term

Goods to be purchased through a dealer (no private sales)

Clear credit history for applicant

Features

Great base interest rate offered to client

No inspections required to goods being purchased

Fast application process

Online finance approval available

Option three – Low Doc Finance for Older Trucks and Heavy Equipment

This type of funding is suited to clients that are looking to purchase equipment greater than older than five years or not being purchased through a dealer.

What are the requirements of low doc lending for older equipment?

Last three months’ bank statements on client’s business trading account

Private sales and dealer purchases are acceptable

Deposit is required or collateral security taken over another item of unencumbered equipment

Paid defaults are acceptable under this policy

Features

Assessment and turnaround times on this type of funding takes a little longer

More paperwork is required from the customer in order to get truck finance approvals

Risk premium added to base rate given the age of the goods

Inspections to be completed (by a licenced dealer) on goods being purchased as well as the collateral security

Option Four – Low Doc Finance for New Ventures

What are the requirements for new start truck and heavy equipment finance?

Cash flow projection to show income and expenses for the first 12 months of operation

Work source letter from a company client will be working for showing they will be a preferred contractor

Upfront deposit of between 10 and 20 percent of the purchase price is required

If no deposit is available, collateral security can be taken over client’s property or equipment they own outright

Applicant to have sound asset backing

Preferable that applicant have relevant industry experience

Goods being financed need to be roughly no older than 7 years old at time of purchase

Features

New venture truck finance can be difficult to secure, unless deal is assessed by a specialist truck finance company

Upfront deposit can be difficult to raise without putting a strain on working capital position

More documentation is required in order to settle these types of deals

Heavy Vehicle Finance has been facilitating full doc and low doc loans for the Transport and Heavy Industries for the last 15 years and have helped many clients that were not able to secure finance elsewhere.  Most customers only consider the major banks as finance options relating to truck finance, but do not look to an equipment finance specialist like Heavy Vehicle Finance.

Our competitive advantage over other Financial Institutions, is that we can offer clients a more diverse range of products compared to only a limited few offered by the big four Banks. This can make a big difference for those in the market that might miss out on securing capital equipment if they were unable to secure finance to do so. For instance, if a client was looking to purchase an additional truck in order to meet the requirements of a new contract – but were declined on finance by the bank, they could potentially loose the contract along with the increased earnings. However, if the same customer came to Heavy Vehicle Finance for finance approval, their change of succuss would be increased significantly.

In brief

If you are looking to finance a truck or any type of heavy equipment to either grow your business or keep it competitive, it is recommended that you give a specialist equipment finance lender a go before narrowing your options with the big four banks.

Our consultants are ready to take your call on 1300 788 740 or you can apply via the pre-approval page of our website.

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