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3 Convincing Reasons Why Financing A Truck For Your Sme Is A Good Idea

If you are running a business of small or medium stature and involves trucks, then considering availing new or used truck finance in Melbourne can be a smart decision. Being a SME business owner, you might face severe cash crunch (like, working capital shortage) now and then. This could lead to halting of business operations or stop you from expanding am existent business.

Moreover, there is always the case of financing your vehicle to make an entry into this highly competitive market. Hence, whatever the case might be, availing such financial advances can prove crucial for your SME nonetheless! Some of the reasons why you should consider this option are –

Reason I – There are a wide range of truck financing options out there

If you are looking for opting for such advances, you will be spoilt for choice. There are numerous options like:

  • Financial lease – Quite contrary to standard business loans, a new or used truck finance in Melbourne or other Australia cities helps a business owner to reap the benefits of vehicle ownership even while you’re repaying the loan. You are required to make such payments until the term ends, and you gain complete ownership of the vehicles.
  • Chattel mortgage – This type of lending facility allows a loan seeker to draw a lump sum amount against a mortgage property. Such advances are generally given out at lower interest rate and simpler repayment terms. This is because, on failure of repayments, the lender can liquidate your assets to recover the outstanding debts.
  • Novated lease – For someone with relatively less financial stability and little knowledge of SME loans, this financial option can prove handy. It allows you to make use of your zero-taxable income to lease a commercial vehicle at ease.
  • Commercial hire – This is slightly different from the rest of the two as it does not provide you with the ownership of a vehicle. Rather you are left with hiring a truck from a lending institution on a pre-agreed period.

Reason II – Vehicle finances are flexible than regular business loans

The flexibility of such loan procurements does not stick to the numerous financial options but also, the manner of loan repayment that suits your bill. The repayment tenure of such finances is far more relaxed and options like part or pre-payment of the entire amount with zero charges are also allowed.

Plus, most new or used truck finance in Melbourne ranges between 1 year to (max) 5 years. During this period, you will be armed with the finance to catapult your leasing right to the top of your consideration list. However, keep in mind such advancements do not offer you the equity of the truck. Rather, you can trade that at the end of the lease period to purchase a vehicle or walk away altogether.

Reason III – Reap lucrative business tax benefits

Depending on the amount of truck finance you are considering to avail, you can choose between a number of tax benefits your business might qualify for. However, the amount you can claim as tax deduction greatly varies on the type of financing option you have picked.

For instance, a chattel mortgage allows a loan seeker to claim tax deductions on the interest amount. On the other hand, finance lease allows you to claim tax exemptions on the entire lease. Thus, before availing any new or used truck finance in Melbourne, make sure to clear these queries from the lending body.

The above mentioned reasons are compelling enough to procure such tailor-made advances right away. But, in your endeavour, you must also consider of availing a truck insurance cover to financially protect your asset. Follow these tips and scale your business to new heights.

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