Business vehicle finance for utes, vans and fleet

Three structures cover most business vehicle purchases. The right one depends on whether you want to own the vehicle at the end, how often you replace, and what your accountant prefers on the balance sheet.

Chattel mortgage is the most common of the three for small and medium businesses buying vehicles they intend to keep. It is not automatically the right one for you, and the tax treatment of each is where your accountant earns their fee.

Once you are buying more than one vehicle, the conversation changes from a single loan to a facility. Rather than a fresh application for every purchase, a master facility gives you an approved limit you can draw against as vehicles are bought.

• One credit assessment covering multiple purchases within a limit
• Faster settlement on each vehicle, because the assessment is already done
• Consistent structure and documentation across the fleet
• A single point of review when the limit needs to grow

A business vehicle application is assessed on the business and the asset together. Both need to hold up.

On the business

• ABN registration date and how long you have genuinely traded
• GST registration, which many commercial lenders treat as a threshold
• Financials, tax returns and BAS on a full doc file
• Bank conduct, including dishonours, overdrawn periods and how the account behaves at month end
• Directors’ credit files and whether the directors own property
• Any ATO balance and whether an arrangement is in place and being met

On the vehicle

• Age at the end of the proposed term, not just at settlement
• Kilometres, condition and how specialised the fit-out is
• Whether the seller is a licensed dealer, a private party or an auction house
• Whether accessories, fit-out and delivery are inside or outside the financed amount

1. 01

   Scope the purchase

   Vehicle, price, fit-out, and whether this is one purchase or the first of several. That decides whether we are arranging a loan or a facility.

2. 02

   Set the structure

   Chattel mortgage, lease or rental, with the term and any balloon settled up front. Where your accountant has a preference, we build around it.

3. 03

   Assemble the file

   Entity details, financials or low doc declarations, bank statements, director details and the supplier quote.

4. 04

   Place it with the right lender

   Commercial vehicle appetite varies more than people expect, particularly on fit-out and on newer ABNs. We go where the policy fits.

5. 05

   Approval and documents

   Conditions are cleared, contracts are signed, and insurance is arranged with the financier noted where required.

6. 06

   Settlement

   The financier pays the supplier. Registration and the security registration are completed, and the vehicle goes to work.

Dealer purchase

The fastest path

Private sale

Verification adds days

Newer ABN

A narrower panel

Fit-out

Policy varies by lender

Insurance

Arranged before settlement

Sometimes a business asks for vehicle finance and the file shows something else: a BAS balance that has been rolling for three quarters, a payment arrangement that is not being met, or four unsecured facilities each taking a weekly direct debit. Adding a vehicle commitment on top of that is rarely the answer.

We will say so. Then we will look at the whole position, because that is the part of our practice that runs deepest. Consolidating trading debt into one facility, or refinancing plant the business already owns, often does more for the operation than a new ute would.