Quick answer: Yes, an established business may be able to finance its first truck even if it has never owned or operated one before.
For many Australian businesses, buying a first truck is not about becoming a transport company. It can simply be the next step in improving how the business operates.
A wholesaler might want to bring deliveries in-house. A construction business may need to transport its own machinery and materials. A manufacturer could decide it wants more control over customer deliveries rather than relying entirely on external freight providers.
In these situations, lenders may look beyond the fact that this is the business’s first truck. They may also consider the company’s trading history, financial position, the vehicle being purchased and, importantly, why the truck makes commercial sense for the existing business.
At LoanBrix, we help Australian businesses compare commercial vehicle and equipment finance options based on the business and the asset being purchased.
Can You Get Truck Finance If Your Business Has Never Owned a Truck?
A business does not necessarily need previous truck ownership to apply for truck finance.
For an established non-transport business, one of the more important questions may be whether the truck has a clear purpose within the existing operation.
For example:
- A wholesaler may want to make its own local deliveries.
- A construction company may need to transport machinery or building materials.
- A manufacturer may want greater control over deliveries to customers.
- A landscaping business may need to carry larger quantities of materials and equipment.
- An equipment supplier may want to reduce its reliance on third-party transport providers.
In each case, the vehicle may be new to the business, but the commercial activity supporting the purchase already exists.
That can help explain why the business is considering first truck finance now, even after operating successfully without a truck for several years.
Why Would an Established Business Buy Its First Truck?
There are several reasons a successful business may reach the point where owning a truck becomes commercially worthwhile.
Bringing Deliveries In-House
Businesses that regularly pay external companies for deliveries may eventually consider operating some of those deliveries themselves.
As order volumes increase, outsourcing every delivery can become less practical.
Owning a truck may give the business more control over:
- Delivery schedules
- Customer service
- Delivery areas
- Urgent orders
- Loading and unloading times
- The way products are handled during transport
Buying a truck does introduce additional costs, including finance repayments, fuel, registration, insurance, maintenance and potentially additional wages.
The decision therefore should not be based purely on whether truck finance is available. The business should also consider whether operating its own vehicle makes commercial sense.
Carrying Your Own Equipment or Materials
Some businesses buy their first truck because their existing vehicles are no longer suitable for the equipment or materials they need to move.
A growing construction company, for example, may find that utes and trailers are no longer practical for the amount of equipment being transported between sites.
The same issue can apply to:
- Landscaping companies
- Equipment suppliers
- Manufacturers
- Building suppliers
- Maintenance businesses
- Industrial businesses
In this situation, the truck becomes another productive asset used within the business.
For information about funding other types of machinery and commercial assets, see LoanBrix’s equipment and machinery lending options.
Reducing Reliance on Subcontractors
A business may also buy its first truck when work previously outsourced to subcontractors becomes regular enough to justify bringing some transport in-house.
This does not necessarily mean eliminating external transport providers.
A business might operate its own truck for predictable day-to-day work while continuing to use subcontractors for overflow, long-distance or specialised deliveries.
When applying for finance, explaining this transition can help demonstrate why the truck is being introduced into an otherwise established operation.
What Will a Lender Look at When Financing Your First Truck?
Lenders can assess both the financial strength of the business and the truck being purchased.
The exact criteria vary between lenders, but an assessment may consider:
- How long the business has been operating
- Business turnover
- Cash flow
- Profitability
- Existing business debts
- Current finance commitments
- Credit history
- The amount being borrowed
- The type of truck
- The age of the vehicle
- The purchase price
- How the truck will be used
- Whether the proposed repayments appear affordable
Different lenders can apply different policies to the same application.
That means being unsuitable for one lender does not necessarily mean an established business cannot obtain first truck finance.
You can also review general business vehicle lending criteria through CommBank’s business vehicle and equipment finance information.
Why Does the Business Case for the Truck Matter?
A lender may want to understand why a business that has operated without a truck suddenly wants to purchase one.
Consider a wholesale business that has traded successfully for five years and has always outsourced its deliveries.
The business now wants to purchase a $150,000 delivery truck.
The purchase could initially look like a major change in the company’s operations.
However, there may be a straightforward explanation.
The business might have:
- Increased its delivery volume
- Won several new customers
- Expanded into another service area
- Experienced increasing freight costs
- Reached the point where operating its own delivery route is practical
- Identified an opportunity to provide faster deliveries
The finance application can therefore be stronger when the purpose of the truck is easy to understand.
Rather than appearing to be an unrelated purchase, the vehicle can be presented as an asset that supports the activities and growth of an established business.
What Should You Prepare Before Applying?
The information required for first truck finance will depend on the lender, loan amount and complexity of the transaction.
An established business may be asked to provide:
- Business and ABN details
- Details of the truck being purchased
- A dealer quote or supplier invoice
- Business bank statements
- BAS statements where required
- Financial statements where required
- Details of existing loans and finance commitments
- Information about how the truck will be used
- An explanation of why the business is purchasing its first truck
- Relevant contracts or evidence of increased business activity where appropriate
Not every application will require every document.
However, having a clear explanation of the purchase can be particularly useful when the vehicle represents a new capability for the business.
Do You Need a Deposit for Your First Truck?
A deposit is not necessarily required for every commercial truck finance application.
Some lenders may consider financing a large proportion, or potentially all, of an eligible truck purchase depending on their lending criteria and the strength of the application.
Whether a business needs to contribute funds may depend on:
- The lender
- The strength of the business
- The amount being borrowed
- The age and value of the truck
- The applicant’s credit profile
- The overall structure of the transaction
Even where a business could potentially finance the entire purchase, it may still choose to contribute cash.
The objective should be to structure the purchase appropriately for the business rather than simply trying to minimise the initial contribution.
Can Your First Truck Be a Used Truck?
Yes, used trucks may also be considered for commercial finance.
For an established business buying its first truck, purchasing used can sometimes reduce the initial purchase price.
However, lenders may look at factors such as:
- The current age of the truck
- Its expected age at the end of the finance term
- Condition
- Purchase price
- Market value
- Truck type
- Expected working life
This is why it can be useful to investigate finance options before committing to a particular vehicle.
A cheaper or older truck is not automatically easier to finance than a newer one.
What Type of Finance Can Be Used to Buy a Truck?
There are several commercial finance structures that may be used for business vehicles.
One commonly used structure is a chattel mortgage or business vehicle loan, where the business purchases the vehicle and the truck is used as security for the finance.
Other structures can include finance leases and hire purchase arrangements.
Which option suits the business can depend on:
- Cash flow
- The purchase price
- Ownership requirements
- Accounting treatment
- Tax circumstances
- The lender being used
For a first truck purchase, the finance structure is important, but it should not distract from the main question: whether the truck is appropriate for the business and whether the repayments are sustainable.
Businesses should speak with their accountant or tax adviser about the tax treatment of a particular finance structure.
Are There GST or Tax Considerations?
Purchasing a commercial vehicle can have GST and tax implications depending on how the truck is used and the circumstances of the business.
The Australian Taxation Office provides guidance on GST when purchasing a motor vehicle.
Depending on the circumstances, businesses may also have deductions or depreciation considerations associated with the vehicle.
Tax rules and individual circumstances can vary, so a business should speak with an accountant or registered tax professional before choosing a truck or finance structure primarily because of an expected tax benefit.
What Happens When Your First Truck Becomes Two or Three?
A successful first truck can eventually become the starting point for a small business fleet.
Suppose a wholesaler brings part of its delivery operation in-house.
After operating the truck for a period of time, the business might discover that the vehicle is consistently at capacity.
The next question becomes whether adding another truck would allow the business to:
- Add another delivery route
- Service more customers
- Reduce outsourced transport further
- Expand into another geographic area
- Provide more frequent deliveries
The conversation has then changed.
When buying the first vehicle, the question may have been:
“Why does this business need a truck?”
When considering another vehicle, it may become:
“How is the first truck performing, and can the business support another one?”
That is why a first truck purchase can be worth considering as part of the company’s broader growth strategy rather than as an isolated vehicle purchase.
Is Truck Finance Available for Melbourne and Victorian Businesses?
Yes. Businesses in Melbourne and throughout Victoria can access commercial vehicle finance from a range of banks, non-bank lenders and specialist commercial lenders.
The available options can depend on the business, the truck and the finance amount.
A Victorian business does not necessarily need to finance its first truck through its existing bank.
Comparing different lenders can be useful because their requirements around trading history, financial documentation, truck age and loan size may differ.
LoanBrix is based in Melbourne and assists businesses in Victoria as well as businesses elsewhere in Australia.
Should You Use a Truck Finance Broker?
A finance broker can help an established business compare lenders and explain the commercial purpose behind its first truck purchase.
This can be particularly useful where the business itself is well established but truck ownership is new.
A broker may help with:
- Identifying lenders that suit the transaction
- Comparing lender requirements
- Reviewing finance structures
- Understanding documentation requirements
- Preparing the application
- Explaining the purpose of the vehicle
- Managing communication with the lender
- Coordinating settlement with the truck supplier
Rather than assessing the application against the policy of only one lender, a broker can look at different options based on the business and the truck being purchased.
Is Your Business Ready to Buy Its First Truck?
For an established business, buying its first truck may simply be the next step in improving capacity, reducing outsourcing or taking greater control over day-to-day operations.
The business does not need to become a transport company.
Instead, the key question is:
How will this truck support the business you have already built?
If the answer is clear, the next step is to determine which lenders and finance structures are suitable for the purchase.
LoanBrix can help established Australian businesses compare truck and commercial asset finance options.
You can review our commercial asset funding options or contact LoanBrix to discuss your first truck purchase.
Frequently Asked Questions
Can an established business finance its first truck?
Yes. Previous truck ownership is not necessarily required. A lender may instead assess the business’s trading history, financial position, the truck and how the vehicle will support the existing business.
Does my business need to operate in the transport industry?
No. Businesses such as wholesalers, manufacturers, builders, landscapers and equipment suppliers may purchase trucks for their own operational needs without becoming transport businesses.
Can I finance a used truck?
Potentially. Many lenders consider used commercial vehicles, although the truck’s age, value, condition and expected useful life can influence the available options.
Do I need a deposit?
Not always. Deposit requirements can vary depending on the lender, business profile, finance amount and vehicle being purchased.
Why would a lender want to know how the truck will be used?
If an established business has never owned a truck before, explaining the commercial reason for the purchase can help show how the vehicle fits into the existing business.
Can LoanBrix help businesses outside Melbourne?
Yes. LoanBrix is based in Melbourne and can assist eligible businesses with commercial finance enquiries across Australia.
