Know how much money you need
Before discussing with a lender, it is advisable you have an estimate sum of money in mind. Plus, you should prepare your proposed repayment options and length of the loan as well.
Determine the truck you wish to purchase
It is important that you do your research concerning the truck or any other commercial utilities or bus you want to buy. Stating the exact vehicle you have in mind will help the lender to establish to what extent the chosen truck is adequate to achieve the business outcome.
Cash flow forecast
Commercial finance approval predominately comes down to assessing your companies cash flows. If your fortunate enough to have been in business for more than 2 years and your financial statements are a true indication of your present situation in regards to cash flows than usually, that is enough for a financial institution to provide you with formal approval. on occasion however, financial statements don’t always paint the best picture and do not give a true indication of current or future cash flows. This is when a comprehensive cash flow statement can provide the lender with enough information to make a more informed decision of what your true lending capacity is. It is recommendable you hire a professional accountant to help you to project a cash flow forecast if required.
Assets and liabilities
When evaluating finances, lenders will always take into consideration the borrower’s assets and liabilities. So please prepare your A & L statement best you can, you will need to present current debts, current repayments, and other investments you may have at the moment.
In most cases the lender will only take security over the vehicle (truck) that you purchase. Personal property such as your personal home usually do not form part of any commercial transaction.
Establish the type of loan you want
Truck loans differ from one another, thus, you must establish what you wish to opt for and this usually comes down to how whether you account on a cash basis or an accruals basis. The 3 available products are a chattel mortgage, hire purchase or lease and your credit history may impact the available products. Before making your decision, it is best you discuss with your accountant, who knows your financial status and business requirements best.