Question 1

What is the cheapest finance for livestock transporters?

Accepted Answer

The interest rates vary across the selection of credit facilities with Chattel Mortgage and Hire Purchase offering lower rates than Leasing, and Lease offering lower rates than Rent-to-Own. Rates and other lender costs also vary across the lending market. The best rates are offered to businesses with good credit histories on loans for new goods.

Question 2

Is road train finance the same as for other heavy vehicles?

Accepted Answer

Essentially, the same loan offers may be offered regardless of the type of vehicle being financed, with the exception of differences between new and used models. The same credit facilities can be used for road trains and other heavy vehicles. Lenders will be assessing the profile and financials of the business operation when making financing offers.

Question 3

What is the best loan option when buying a transporter and B-double trailers separately?

Accepted Answer

When purchasing a chassis cab and trailers separately from different suppliers, generally two separate loans would be required. The same asset acquisition credit facilities can be used for both vehicles and trailers.

Question 4

Will my interest rate change if the RBA announces rate changes?

Accepted Answer

Interest rates on asset acquisition loans are generally at a fixed rate. This means the rate will not change when the Reserve Bank makes changes to the cash rate, and/or if the lender makes changes to their rates. When a variable rate loan has been arranged, the rate is subject to changes.

Question 5

What is the best trailer loan for tax deductions?

Accepted Answer

Tax deductions are available on all credit facilities. Rent-to-Own and Lease provide deductible monthly payments. Hire Purchase and Chattel Mortgage provide deductions through asset depreciation and with deductible interest.

Question 6

Can I get a loan for the total purchase price of a livestock transporter?

Accepted Answer

Approval for no deposit finance – borrowing the complete purchase price, is subject to lender assessment of the individual application. Lenders will be considering the loan to value ratio and the credit profile of the applicant. No deposit finance is widely approved, especially for new vehicles.

Question 7

What is a residual?

Accepted Answer

A residual is the portion of a lease which is payable at the end of the term as a lump sum. When the residual is finalised, the lessee has full ownership of the asset. Residual percentages are per ATO guidelines.

Question 8

What is the procedure to finalise heavy vehicle loans at the end of the term?

Accepted Answer

The end of loan arrangements to finalise agreements is similar for all forms of asset acquisition credit. With Chattel Mortgage and Hire Purchase, the balloon needs to be finalised. With Leasing, the lessee has the choice to pay the residual or forego ownership by not finalising the residual and handing the vehicle back to the lender. With Rent-to-Own, if the borrower chooses to take ownership they agree with the lender on a buyback and make that payment.

Question 9

Will I need a lot of other assets to offer as collateral for a heavy vehicle loan?

Accepted Answer

Collateral requirements on heavy vehicle financing are subject to lender approval. Some borrowers can be approved for using only the vehicle being financed as collateral.

Question 10

I want to buy a B-double at auction, can I get my loan approved beforehand?

Accepted Answer

Yes. Pre-approved finance is generally available from all lenders.

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