For some businesses trucks are an essential part of day-to-day operations. You may need a new truck to increase your supply of goods to your customers. Perhaps you require a truck to transport staff and equipment to a site. These vehicles can be considered as an investment for your business. That is why you as a business owner need to know what choices are available.
Understanding Truck Tax Benefits
Reasons for purchasing a truck vary from one business to another. Sometimes, it is essential to acquire a new vehicle in order to win a contract. In some cases, the current vehicle needs to be replaced because repairs would prove to be the more expensive option.
Efficient use of money can be equated to opportunities such as tax benefits when taking out truck loans or additional capital for business. You can claim a full deduction of running costs expenses if your business is a company but you may have to pay fringe benefits tax if any employee uses the truck for personal use. If you operate as a sole trader or in a partnership then there are other ways you can make a claim against your truck. In order to make a full deduction claim the truck must be mainly used for businesses purposes. It is considered reasonable to use a business vehicle to travel to and from work but any other personal use needs to occasional.
Tips to Bolster Your Chance of Getting a Truck Loan
Fortunately, there are financial institutions that specialise in truck finance. This gives businesses sufficient elbowroom to acquire the vehicle they require without restricting their cash flow. If your local bank has deemed your business to be unqualified for a truck loan, you can go elsewhere. Here are a few tips to bolster your chances of getting a truck loan, especially if you are unable to show large profit margins.
While banks provide a valuable service to businesses, they often need to see a large amount of paperwork before they will consider you for a loan. Thus, you will need to show them proof of large profits and add backs. Other lenders offer low document options where you don’t have to present any paperwork. You just need to show the lender that, indeed, you can pay them back for the amount you have been loaned. This can be done if you are a property owner or buyer. The security will be taken over the truck you are buying and not the property.
Should you buy New or Used?
This is often a question that comes up when buying a truck for a business. The initial cost for a new truck is higher but will a used truck cost you more in the long run? If you do decide to buy a used truck make sure that you have additional funds available for possible immediate needs such as new tyres.
Other considerations are the size of the truck as this can play a big part in transportation economy. You could end up wasting fuel if you buy bigger than you need. On the other hand overloading a truck will case it to struggle against the load, which will use a lot of fuel and cause more wear and tear. Do an assessment of the size you need against the running costs of your business.
Send us a message if you have any questions about truck finance and we will not only answer your questions but also offer you an obligation free finance consultation.