Are you looking to expand your business with new vehicles or equipment? You may need to borrow money to purchase assets. Learn more about business vehicle loans and equipment finance before u loan.

Benefits of asset finance for business

Australian business loans for vehicles and equipment are a valuable resource to help businesses grow.

  1. Boosting cash flow –. With a business loan, you don't have to deplete your savings to purchase essential assets. You can save your working capital for day-to-day operations.
  2. Tax benefits –. In Australia, some business loans offer tax benefits. For example, depreciation deductions subtract a portion of the vehicle or equipment's declining value from your taxes. Be sure to consult with your accountant or tax advisor to maximise these advantages.
  3. Asset growth – You can increase your business' productivity and efficiency by investing in quality vehicles and equipment. Better productivity and efficiency can lead to increased revenue.

Types of Business Loans

Equipment Financing

Business equipment loans are specific to buying equipment and machinery for your business. The equipment itself often serves as collateral. This means if you don't make your repayments the lender can sell the equipment to recoup funds.

Vehicle Loans

A business vehicle loan can help you start or build a fleet of vehicles, such as trucks or delivery vans. Look for vehicle loans with competitive interest rates and flexible repayment terms.

Business Line of Credit

A line of credit lets you draw funds as needed, making it ideal for businesses with fluctuating financing needs.

Is it better to finance a car for business?

Compared to personal car loans, business car loans may offer you more benefits such as tax deductions. Business loans for equipment and vehicles offer specific features to suit business owners. If you are unsure, talk to a finance broker about which options will best suit you.

Can I get a car loan as a sole trader?

Yes, all types of businesses from large companies to self-employed and sole traders can get business car loans. You must have an ABN (Australian Business Number) and use the car for at least 50% business use. As with any loan, you will need to meet the lender's criteria. Work with a finance broker to help you find the loan that fits your specific situation.

Low-doc car loan for self-employed

A low-doc car loan stands for low-document car loan. Put simply, low-doc loans mean you don't need to provide as much paperwork as a regular loan application. This may suit you if you are self-employed, because you might not have consistent payslips or PAYG documents.

Are car loan repayments tax-deductible?

Only the interest part of your repayment (not the prinicipal amount) is tax-deductible. This only applies for commercial vehicle and equipment loans. For personal vehicle loans, you cannot claim the repayment or interest on tax.

Keep in mind, you can claim motor vehicle expenses too such as fuel, registration, insurance and servicing. These expenses must be essential to running your business, such as travelling between different business premises or deliveries.

Loan Repayment

Repaying your business loan is crucial to maintaining a healthy financial profile. Here are some tips for successful repayment:

  • Budget wisely – Create a budget that includes your loan repayments. Make sure to factor in interest and fees.
  • Automatic payments – Setting up automatic payments can help you stay on track and avoid late fees.
  • Early payments – Consider making extra payments to pay off the loan faster and reduce overall interest costs. Talk to your broker about whether early payments are an option for your chosen loan, and whether it will work in your favour.

Choosing the right lender and loan type is crucial. Take your time to research and consult with a finance broker to ensure you're on the right path. With a good strategy and the right financing, your business will thrive.

Explore Business Loans