It does not seem that long ago that the Federal Treasurer Josh Frydenberg and the various State Treasurers were announcing 2021/22 budgets full of optimism for business. The Australian economy had been out-performing the growth forecasts, unemployment figures showed a decline over several months and Australians were seriously contemplating and even planning their return to life and business as semi-usual.
Enterprising individuals were embarking on plans to set up their own businesses, many involving the purchase of a truck. The truck buying decision may be to establish an owner-driver, contractor set-up in the general freight or agricultural sector; to support a new business with in-house deliveries and operations; taking advantage of the surge in online shopping and home deliveries; or the purchase of construction trucks to set-up as a contractor to take advantage of the work opportunities on infrastructure projects across the country.
Then Delta arrived, uninvited and unwelcomed. The scenario seemingly changed in an instant. Raising serious questions around whether or not NOW the time to proceed with the truck purchase plan. Especially when a low docs or no docs truck loan application is needed for most new businesses.
New businesses have a key difference from existing operations when it comes to sourcing finance. The one major thing missing is usually the financial documentation required by the banks to meet their business loan criteria. Start-ups and relatively young businesses have not had the trading time to acquire the data to complete the loan application.
So is now the time to proceed with a low docs truck loan application? What has and hasn’t changed in the lending sector over recent months and may change moving forward? What are the options moving forward?
We provide information on a range of factors around lending to assist those currently requiring access to a low docs or no docs truck loan.
Interest Rates For Truck Loans
It is widely known that interest rates are currently at historic low levels. In response to the economic impacts of the pandemic, the RBA cut the official cash rate during 2020 to the current level of 0.1%. This has led to highly competitive rates across many lending sectors.
One outcome has been the soaring house price market in response to low mortgage rates. This in turn has led to a call by some economic experts for the RBA to raise rates to cool the market.
So how long will the current low interest rate climate last? The RBA Governor has stated on a number of occasions that the bank is looking to a target of 2-3% inflation and unemployment in the sub 5% range, sustained, before moving on rates. In June the unemployment figure dropped to 4.9% – is that enough to trigger a rise? Highly unlikely as inflation is still in the 1% range and it is expected that the Greater Sydney COVID-19 outbreak may impact negatively on unemployment figures for July.
Our current interest rates on truck loans are at our trademark cheap levels across our loan portfolio. Under the current RBA indicators and subject to individual lender decisions, this situation could be expected to continue in the near future.
While advertised lending rates are typically based on applicants with a good credit profile and application, low docs and no docs loan applicants can secure loans at these cheap rates, subject to individual considerations.
Summing up, it would not be expected that current and any future short-term lockdowns in any part of the country would singularly trigger a change in interest rates.
A major consideration for business borrowers across the board is taking advantage of current taxation benefits through IAWO and temporary full expensing. These measures have been available since April 2020 and amended in the 2021/22 Federal Budget. They provide attractive tax deductions for eligible businesses that acquire eligible assets in the qualifying period. The appropriate finance product is required for these measures and that is considered as Chattel Mortgage.
As long as the business and the asset meet the eligibility criteria, low docs truck loan recipients should be in a position to take advantage of these measures. In deciding on a truck loan product, business owners are strongly advised to consult with their accountant to ensure the loan meets the individual target objectives for the business.
All business finance products offer tax deductible elements and once a loan is secured, these benefits can be realised with low docs truck loans.
Access to Transport Lending Sources
A major concern for any business currently considering finance could be the attitude of banks and lenders as a result of the fall-out from the extended Sydney lockdown. NSW is without doubt the nation’s economic powerhouse and the business shutdowns have the potential for widespread negative impacts.
Banks tightened their lending for a time during the 2020 pandemic crisis and both banks and non-bank lenders are currently offering support by way of repayment deferrals and other relief to customers suffering financial hardship as a result of lockdowns. How this flows through to lender attitudes to new loan applicants will depend on individual lenders and the business applying for the truck loan.
In regard to low docs loans, banks are not typically known for approving this type of finance due to their rigid lending criteria. Non-bank lenders are the primary source for such loans and Jade Truck Loans is accredited with many non-bank lenders that do offer this type of finance.
Engaging Jade as your lender provides access to these lenders to source cheap interest rate low docs truck loans. In addition, Jade consultants can provide invaluable guidance and direction in structuring low docs loan applications as well as our trademark tough negotiating skills to achieve the most suitable loan conditions.
Another major consideration is the impact on a credit report caused by a business applying for loans to multiple banks and lenders. When using our services to canvass the market on behalf of our customers, there is no effect on a credit profile. Especially for new businesses, building a good credit profile can be an important aspect for the operation for future credit and finance applications.
All loan applications including low docs and no docs, are individually assessed by our lenders based on the quality of the application and there is no obligation attached to requesting a quote.
Hopefully this information has assisted your decision making to proceed with making enquiries with us around a low docs truck loan at this stage.
Contact US on 1300 000 003 for a quote on a truck loan.
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.