Get approved with past credit issues
Bad credit truck loans are a commercial finance option that allows businesses to purchase vehicles when their credit history is less than ideal. Although you can expect to pay slightly higher interest rates, there are some excellent tax and GST benefits to counter that. Some specialist lenders will look beyond your credit rating and take other factors like your trading history along with your current financials into account when assessing a bad credit truck finance application.
Savvy helps thousands of Australian businesses and owner-drivers access specialist low doc and bad credit truck loans every single year. We partner with dozens of the country’s top commercial loan providers so we can provide access to more vehicle finance solutions and products. At Savvy, we like to offer you forward-looking loan options, so we base our approach on finding the best deal for your situation, business aims, and your current financials – not so much your history.
Bad Credit Truck Loans work in the same way as any other truck financing option such as a chattel mortgage, hire purchase or lease, A bad credit option just provides more flexibility with credit policy to assist customers that would be rejected by main stream bank and lenders. Our commercial loan options are tax effective, allowing you to claim on interest, depreciation and GST. We can also assist with low doc truck options if up-to-date tax returns are unavailable.
The short answer to this question is that you can. Savvy partners with some commercial lenders who will consider bad credit applications for zero deposit equipment finance. However, with a less-than-perfect credit history, some equity goes a long way with loan providers. You should at least consider offering a deposit if you’re in a position to do so.
At Savvy, we believe in finding the best finance solutions for every business, even if that’s one with a poor credit history. More often than not, companies and owner-drivers with bad credit scores get charged a higher interest rate. However, it’s important to understand that your credit rating isn’t the only factor on which a lender assesses your application.
Using a broker like Savvy is a significant advantage when applying for any commercial finance, but it’s probably doubly important when you’ve had credit issues in the past. That’s because we work with so many trusted lenders, and we know their various conditions. We’ll look at your case on merit and select loan providers who suit. So, if we know your credit score is relatively low but you’ve been trading for a few years, for instance, we can start from there and work with that to get you a great deal.
Businesses that apply for a bad credit truck loan get some great taxation benefits. If you’re registered for GST, then things get even better. When you start a truck loan agreement, you find the truck you want to buy, and then as soon as the lender approves your application and forwards the funds, you buy the vehicle – but you’ll pay GST on the purchase price – and that represents a sizeable portion of what you’ve borrowed. In the case of a $50,000 truck, for example, the GST is over $4,500.
When you borrow any amount, you pay it back, along with interest, over a fixed period. With bad credit truck loans, that can be anything between one and seven years. Without a residual, you’re paying down 100% of the amount you’ve borrowed during that time, divided up into a fixed amount of equal payments. If you have a residual that’s based on 25% of what you borrowed, then you’re only paying back 75% of that amount, so your repayments get lower.
When the term ends, and the residual is due, you can either pay it off (if business is good) or refinance the amount. Refinancing a residual works particularly well with truck finance because rigs tend to last a long time and many companies and owner-drivers keep them for many years. Residual refinance might not work as well for computer equipment or electronics, for example, because technology changes quickly. Another potential plus if you did end up refinancing the residual on a truck loan is that by then, your bad credit experience would be maybe another seven years behind you – and you’d likely pay a lower rate.