As the economy shows signs of rebounding from the most challenging phases of the pandemic, business operators might find themselves breathing a collective sigh of relief. However, this apparent improvement is accompanied by fresh challenges that demand attention. In order to fully leverage the opportunities and advancements that lie ahead in your sector, a significant factor is preparedness.
For businesses, being poised to capitalize on upcoming developments may entail strategic refinancing of truck loans. This manoeuvre has the potential to infuse a new level of vitality into operations as the new financial year unfolds. By trimming repayments, businesses can effectively manage expenses within the constraints of their cash flow and established budgets. This proactive step positions businesses to navigate the evolving economic landscape with flexibility and financial resilience, while maximizing their capacity to harness the opportunities on the horizon.
On the down side, interest rates are on the rise as the RBA prepares for what could be several months of cash rate hikes. Many costs including energy and general living expenses are causing pain points for both business and households. Labour shortages and supply chain issue continue to disrupt operations in many sectors.
On the up side, many industries are bouncing back, the construction pipeline is reportedly well-stocked and infrastructure projects continue to roll out. Despite the May rate rise by the RBA, truck loan interest rates remain accommodative and Jade Truck Loans continues to achieve better rated loans.
Addressing current outgoings, particularly truck repayments, may be a smart strategy to stay ahead of the game. Refinancing truck loans can be an integral part of a general review of business finance and can be used effectively to achieve a range of objectives.
Refinancing Objectives
There are a range of reasons why operators may consider truck refinancing.
They can include:-
- To reduce truck loan repayments to better meet current and projected cash flow.
- To change to a different loan type to meet changes in business operation and structure.
- Due to change in business ownership, eg the withdrawal of a business partner.
- To achieve lower interest rate loan than the original loan.
- Improved credit profile than when original loan was acquired, eg turning around a bad credit situation.
- Relief from restrictive loan conditions.
- Change of lender for various reasons.
- General overview of the business finance situation.
- Combine a number of asset loans into one loan to streamline and simplify finances.
Process and Procedures
Refinancing involves the process of substituting an existing loan with a new one, and this transition can at times entail complexities. In such instances, seeking the guidance of professionals like Jade Truck Loans is highly recommended. Additionally, it's prudent to Consult the business accountant or financial officer to ensure the chosen loan product aligns with the overarching business objectives. To make well-informed decisions, it's invaluable to Compare Truck Loans & Finance Options From Major Lenders, enhancing your ability to secure a financing solution that best serves your needs.
When arranging refinance for our customers, our consultants will listen intently to what the business owner is looking to achieve through the process. This will guide our consultants in how the new truck loan should be structured.
Our consultants source the cheapest truck interest rates quote for the refinanced truck loan for consideration by our customer. Where we consider the new loan does not place the business in an improved position we would not advise proceeding. But the decision ultimately is up to our customers. We work in their best interests at every stage of the process but they retain full control of all decisions.
The new truck loan can be requested from the same bank or lender as the current loan or from a different lender. We have lenders that specialise in heavy vehicle finance and they can be more flexible than many banks when it comes to negotiating loan conditions and rates.
Eligibility
All types of businesses can consider refinancing truck loans. For businesses that were just starting out when the original loan was acquired but have now grown and flourished, it could be advantageous to consider refinance. If the loan was a No Docs or Low Docs Truck Loan, it may have special conditions attached which are restricting the business in some way. Conditions which may not be applied now the business has had a few years of operations.
The same scenario may apply to refinance what was originally a Bad Credit Truck Loan.
Refinance can be source for all types of trucks including truck-trailer combos.
Finance Products and Interest Rates
Refinance can be sought with the same loan type or with a different finance product. Where say Rent to Own may have been the most attractive option when the current loan was set-up, a Lease or Chattel Mortgage may now be a better fit for the business objectives.
We offer the full range of asset finance for refinancing truck loans – Chattel Mortgage, Commercial Hire Purchase, Leasing, Rent to Own.
The interest rates vary across the selection as does the way tax deductions are realised.
Considerations
As with all major finance decisions, refinancing should be considered from all perspectives. In particularly:-
- Refinancing would not make the truck eligible for IAWO or temporary full expensing. Under the criteria for these measures the assets must be new to the business not existing.
- Costs will likely be incurred in paying out the current loan prior to the end of the finance term. These costs will be rolled into the refinanced loan but should be allowed for.
Timing often plays a pivotal role, especially in matters of refinancing. If the thought of refinancing is lingering in the background, it's worth elevating it to the forefront of your considerations and initiating action—starting with requesting a quote from us. The impending likelihood of further interest rate hikes underscores the significance of acting swiftly. Waiting a few months could result in facing higher rates compared to the current scenario.
While there might be a natural inclination to await the impact of the change in government on your business, it's important to acknowledge that this process may take a while to unfold. While Treasurer Jim Chalmers has indicated that a budget will be unveiled in October, waiting for this announcement to ascertain potential benefits could result in missing out on the more favourable interest rates accessible right now. The key takeaway is that proactive steps taken today can yield significant financial benefits, particularly as interest rate dynamics continue to evolve.
Contact Jade Truck Loans on 1300 000 003 to discuss refinancing truck loans to better place the business to take on opportunities this coming financial year.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
