What Is Truck Finance? | Complete Guide | Equifund

What Is Truck Finance?

Truck finance is a form of asset finance that allows Australian businesses to purchase trucks without paying the full cost upfront. Instead of making a single large payment, borrowers make regular repayments over an agreed term — typically between 1 and 7 years. The truck itself serves as security for the loan, meaning no additional property collateral is usually required.

In Australia, truck finance is provided by banks, non-bank lenders, and specialist finance brokers. A finance broker like Equifund Financial Group compares rates from 80+ lenders to find the most competitive option for each client.

Types of Truck Finance in Australia

Chattel Mortgage

A chattel mortgage is the most common form of truck finance in Australia. The borrower takes ownership of the truck immediately while the lender holds a mortgage over the asset until the loan is fully repaid. Interest payments and depreciation are tax-deductible, making this popular with businesses registered for GST.

Finance Lease

Under a finance lease, the lender owns the truck and leases it to the borrower for an agreed term. At the end of the lease, the borrower can purchase the truck for its residual value, re-lease it, or return it. Lease payments are fully tax-deductible as a business expense.

Hire Purchase

Hire purchase is similar to chattel mortgage but structured differently. The borrower hires the truck with the option to purchase it at the end of the term. The interest component of repayments is tax-deductible.

Operating Lease

An operating lease is a rental agreement where the borrower uses the truck for a set period without ever owning it. This is ideal for businesses that want to upgrade their fleet regularly.

How Much Does Truck Finance Cost?

Truck finance rates in Australia typically range from 4.5% to 12% per annum, depending on the borrower's credit history, the age of the truck, and the loan term. Key factors include:

• Credit score: Better credit typically means lower rates
• Truck age: New trucks generally attract lower rates than used trucks
• Deposit: A larger deposit can reduce the interest rate
• Loan term: Shorter terms often have lower rates but higher monthly repayments
• Business history: Established businesses with strong financials receive better rates

Who Can Apply for Truck Finance?

• Sole traders with an ABN
• Companies — Pty Ltd and partnerships
• Trusts — family and discretionary trusts
• Start-ups — some lenders offer finance with as little as 6 months trading history

Low doc options are available for borrowers without traditional financial documentation.

How to Apply for Truck Finance

1. Get pre-approved: Submit a simple application to a broker like Equifund Financial Group. Pre-approval can be obtained in as little as 24 hours.
2. Choose your truck: Shop with confidence knowing your approved budget.
3. Finalise the finance: Your broker submits to the lender offering the best rate.
4. Settlement: Funds are released and you take delivery of your truck.

Tax Benefits of Truck Finance

• Instant Asset Write-Off: Eligible businesses can immediately deduct the full cost of the truck
• Interest deductions: Interest on truck finance is generally tax-deductible
• Depreciation: Under chattel mortgage, the truck can be depreciated over its effective life
• GST credits: GST-registered businesses can claim the GST component

Truck Finance Through a Broker vs a Bank

• Access to 80+ lenders vs a single bank's products
• Faster approvals — often within 24 hours vs weeks with banks
• More flexibility — options for low doc, no deposit, and impaired credit
• Expert guidance — brokers specialise in asset finance
• No cost to the borrower — brokers are paid by the lender

Frequently Asked Questions

Can I finance a used truck in Australia?

Yes. Most lenders finance both new and used trucks. Through brokers like Equifund, there are typically no age restrictions on the asset.

Do I need a deposit for truck finance?

No. Many lenders offer no-deposit truck finance through brokers with wide lender panels.

How long does truck finance approval take?

Pre-approval through a broker like Equifund can be obtained in as little as 24 hours. Full settlement typically takes 2-5 business days.