Much of New Zealand’s industry relies on transport for the success of its operations. Yet, not many businesses can support cash to purchase their required vehicle (or vehicles) outright. If you are in the market for truck, or a fleet, it’s highly likely you’ll need to source truck finance. But, there are a few things to consider before signing on the dotted line.

Deposit payment

Some lending facilities will require you to pay a percentage of the truck’s total cost before lending you the rest of the funds. The deposit usually ranges from 0% to 20%, which is a big fluctuation when you take into account the purchasing price of a truck. Every lender has its own thresholds around the deposit payment, so make sure you shop around to find one that suits you. A great tool in the preliminary stages is a loan calculator.

Repayment terms

The structure in which you repay the loan takes a few different factors into account:

• the deposit payment
• the length of the loan
• the loan’s interest rate.

The length of a loan is fairly standard across the industry and can range from 12-84 months (or one to seven years). Keep in mind, a longer-term loan will have lower repayment amounts, but interest will have longer to accrue. Once you determine the best term for your situation, you’ll have a much better idea of what finance terms are acceptable to you.

The interest rate accompanying your truck loan can vary depending on the type of loan you’re after, and what institution is providing that loan. The difference between 6% and 10% on a loan of $100,000, repaid over 60 months is close to $12,000, and that’s knowledge you need.

Qualifying criteria

When it comes to securing truck financing, there are various criteria you will need to meet before your loan application can be approved. This includes:

• the age and financials of your business,
• your business’s credit score
• any existing assets and debts
• the age and condition of the truck.

If you want greater certainty when applying for finance, make sure you know the answer to each of the above qualifying factors. It’s also a great exercise in overall business operation.

Why choose a finance broker over a bank?

There are many factors that see business owners choose a finance broker for their lending. Instead of being tied to one lending institution or funding option, brokers build and maintain strong relationships with multiple lenders so when you need the right finance solution for your business, it can be tailored to suit your individual needs.

A broker will meet you, visit you onsite, sit down with you, and take the time to understand your business completely. They’re also more likely to have a working history in the industry.

A finance broker also acts as part of your business. They are your port of call for all things pertaining to finance and have your truck and transport company’s best interests at heart. Your broker will take the hassle out of any finance dealings and leave you to get on with business.