Choosing between a truck finance broker and a bank comes down to how established your business is, the truck you are buying, the documents you have available and how closely your circumstances fit standard lending criteria.

For an established transport business with strong financial statements and a long banking history, an existing bank may be a straightforward place to start. A new ABN, limited financial history, used truck purchase or previous credit issue can make the comparison more important because different lenders assess these applications in different ways.

The Asset Finance Shop (TAFS) arranges truck finance for Australian owner-operators, sole traders and transport businesses through access to more than 80 bank and non-bank lenders. Our internal credit team reviews each application before a formal lender submission, helping match the business with lenders whose criteria suit the applicant and truck being purchased.

This guide explains the differences between using a truck finance broker and approaching a bank directly, with particular focus on new ABNs and applications that need a more tailored assessment.

Should You Use a Broker or a Bank for Truck Finance?

Both can provide commercial vehicle loans, but the process is different.

When you approach a bank directly, that bank assesses the application against its own products and lending criteria.

A truck finance broker can assess the application across a broader group of lenders and identify options based on the applicant's business history, credit position, truck and documentation.

For a newer transport business, that lender access can be particularly useful because there is no single set of rules that applies across the entire truck finance market.

One lender may require an established trading history, while another may consider a newer ABN when the owner has strong transport experience and confirmed work.

How Bank Truck Loans Work

Banks provide truck financing directly to eligible business customers.

The bank will generally assess:

• ABN and trading history
• Business financial statements
• Tax returns or Business Activity Statements
• Recent bank statements
• Existing debts and repayments
• Personal or business credit history
• The truck being purchased
• Deposit or trade-in availability
• The business's ability to afford the loan

Established businesses with complete financial information and a strong banking relationship may find this process straightforward.

The main limitation is that the application is being assessed against one lender's policy. If that lender does not accept the ABN age, asset, documentation or credit profile, the business will need to consider another option.

How a Truck Finance Broker Works

A truck finance broker assesses the application before matching it with a lender.

At TAFS, the process begins by reviewing:

• Business history
• ABN age
• Transport experience
• Credit position
• Bank statements
• Current and upcoming work
• Existing finance commitments
• The truck being purchased
• Deposit or trade-in availability

TAFS then assesses the scenario against the criteria of more than 80 lenders.

The aim is to identify a suitable lender before making a formal application.

This can be especially useful when the business does not fit a standard lending profile.

Broker vs Bank for Truck Finance

Neither option is automatically better for every business. The right path depends on the applicant and transaction.

Is a Truck Finance Broker Better for a New ABN?

A broker can be particularly useful when the ABN is new because different lenders have different minimum trading requirements.

A newly registered business may not have:

• Several years of financial statements
• Business tax returns
• Long-term bank statement history
• Existing commercial finance history

That does not mean the applicant has no experience.

An owner-driver may have spent years working as:

• An employed truck driver
• A subcontractor
• A transport manager
• A fleet driver
• An operator in the same industry

Selected lenders may consider that background when assessing truck finance for a newer business.

The lender can also look at the expected work, applicant's financial position and the truck being purchased.

What Can Help a New ABN Get Truck Finance?

A strong new business application gives the lender a clear picture of how the truck will generate income.

Industry Experience

Previous transport experience can be important when the business itself has limited trading history.

The lender may consider how long the applicant has worked in the industry, the type of vehicles operated and whether the new business is continuing similar work.

Work Source

Evidence of upcoming work can support the application.

This might include:

• A transport contract
• Subcontracting arrangement
• Work source agreement
• Letter of intent
• Regular linehaul work
• Civil or earthmoving contracts
• Courier or delivery work

The stronger the evidence of future income, the easier it is for the lender to understand how the truck will be used.

Bank Statements

Even when complete financial statements are unavailable, bank statements can provide useful information about the applicant's current financial position.

They may show:

• Existing income
• Current repayments
• Savings
• Account conduct
• Regular expenses
• Available working capital

Deposit or Trade-In

A deposit is not required for every application, but it can strengthen the proposal.

It reduces the finance amount and can give the lender more comfort where the business is new.

A trade-in may also contribute equity toward the purchase.

A Suitable Truck

The truck should make sense for the work the business intends to perform.

The lender may consider:

• Purchase price
• Age
• Kilometres
• Condition
• Market value
• Manufacturer
• Expected working life
• Intended use

A realistic truck purchase can make the application easier to support.

What if You Have Limited Financial Documents?

Some truck finance applications can be assessed under low doc lending criteria.

A low doc application may use:

• Driver's licence
• ABN details
• Recent bank statements
• Credit history
• Industry experience
• Existing work
• Assets and liabilities
• Truck information

Complete financial statements are not always required.

Low doc does not mean the lender skips its assessment. The lender still needs to be satisfied that the applicant can afford the repayments.

A truck finance broker can help determine which lenders consider low documentation applications before a formal submission is made.

What if You Have Previous Credit Issues?

Previous credit issues do not always prevent an applicant from obtaining truck finance.

The lender may consider:

• What caused the issue
• When it occurred
• Whether any defaults have been paid
• Current credit conduct
• Recent bank statement performance
• Existing loan repayment history
• Available deposit
• Truck value
• Overall repayment capacity

A bank will assess those circumstances under its own credit policy.

A broker can compare lenders whose criteria differ, which may provide additional options depending on the situation.

Credit issues can still affect:

• Interest rate
• Loan term
• Deposit requirement
• Available lenders
• Balloon payment

The full circumstances should be disclosed early so the application can be assessed properly.

Can a Broker Help With ATO Debt?

Selected lenders may consider truck finance where the business has existing ATO debt.

The lender will usually want to understand:

• The amount outstanding
• Whether a payment arrangement is in place
• Whether repayments are being maintained
• Current business cash flow
• Existing debts
• The proposed truck repayment
• How the truck will contribute to business income

ATO debt does not automatically mean an application will be declined, but it becomes part of the overall credit assessment.

A broker can identify lenders that are prepared to consider the situation before submitting the application.

What About Used Truck Finance?

Used trucks can be financed through banks and non-bank lenders, but their asset criteria can differ.

The lender may assess:

• Vehicle age
• Kilometres
• Mechanical condition
• Purchase price
• Market value
• Expected remaining working life
• Seller type

Some lenders are more comfortable with older trucks than others.

This is one area where lender comparison can be valuable because the truck itself can determine which providers are suitable.

Can You Finance a Truck From a Private Seller?

Yes. Selected lenders will consider private-sale truck finance.

Private transactions usually require additional checks, including:

• Seller identification
• Proof of ownership
• Vehicle identification number
• Registration details
• Purchase price
• Existing finance or security
• Truck condition
• Market value

A broker can coordinate the buyer, seller and lender requirements through the settlement process.

Can a Truck Finance Broker Help With Auction Purchases?

Yes. Auction finance may be available depending on the applicant and lender.

Pre-approval can help the business understand its finance position before bidding.

Final approval will still depend on the truck purchased.

Before bidding, consider:

• Purchase price
• Buyer's premium
• GST
• Transport costs
• Registration
• Repairs
• Servicing
• Insurance

Auction payment deadlines can be short, so completing the initial finance assessment beforehand can help reduce delays.

What Is the Main Finance Structure for a Truck?

The main finance product TAFS arranges for commercial truck purchases is a chattel mortgage.

Under a chattel mortgage:

• The business owns the truck from settlement
• The lender registers a security interest over it
• The loan is repaid over an agreed term
• A deposit or trade-in may be included
• A balloon payment may be available
• The lender's security is removed after the loan is repaid

A balloon payment can reduce regular repayments by leaving part of the finance amount until the end of the term.

The business may be able to claim the GST on the purchase price, along with eligible interest and depreciation deductions. Speak with your accountant about the tax treatment that applies to your circumstances.

Is a Bank More Suitable for an Established Business?

It can be.

An established business may already have:

• Several years of financial statements
• Strong bank statement history
• A clean credit profile
• Existing commercial finance
• Long-term customer contracts
• An established relationship with its bank

Approaching the existing bank can be a practical option.

It can still be useful to compare the proposed rate, term, balloon and repayment with other available truck financing options before committing.

When Does Using a Broker Make Sense?

A truck finance broker can be useful when:

• The ABN is new
• Full financial statements are unavailable
• The truck is used or older
• The purchase is through a private seller
• The truck is being purchased at auction
• The applicant has previous credit issues
• The business has ATO debt
• The owner is moving from employee to owner-driver
• The business is adding another truck
• The current bank's criteria do not fit the scenario
• The applicant wants to compare lenders without approaching them individually

The broker should understand the business, asset and intended use before recommending a lender.

What Should You Compare Besides the Interest Rate?

Interest rate matters, but it is only one part of commercial vehicle finance.

Compare:

• Amount financed
• Deposit
• Interest rate
• Regular repayment
• Finance term
• Balloon payment
• Establishment costs
• Other lender charges
• Early payout conditions
• Total estimated amount repayable
• Documentation requirements
• Approval conditions
• Asset restrictions

A low rate may not help if the lender requires a large deposit or will not finance the truck being purchased.

A lower monthly repayment may also come from a longer term or larger balloon, which can increase the amount paid over time.

How Does the TAFS Truck Finance Process Work?

1. Initial Assessment

TAFS reviews the applicant's ABN history, industry experience, financial position and proposed truck purchase.

2. Soft Credit Check

TAFS begins with a soft credit check that leaves no mark on the applicant's credit file.

3. Internal Credit Review

The internal credit team assesses the application against the criteria of more than 80 lenders.

4. Compare Suitable Options

Finance options are reviewed based on the business, truck and proposed structure.

5. One Formal Application

Once a lender is selected, the formal application is submitted.

6. Approval and Settlement

TAFS manages lender requirements and coordinates settlement with the truck seller.

Straightforward applications can be approved in as little as 24 hours once the required information is available.

Questions to Ask a Bank Before Applying

Before submitting directly to a bank, ask:

1. Does the bank accept new ABNs?
2. How much trading history is required?
3. Are complete financial statements required?
4. Can low doc applications be considered?
5. Is a deposit required?
6. Can used trucks be financed?
7. What is the maximum truck age?
8. Can private-sale purchases be financed?
9. Is auction finance available?
10. What interest rate and term apply?
11. Can a balloon payment be included?
12. What happens if the application does not meet the bank's criteria?

Understanding these requirements before making a formal application can help avoid unnecessary delays.

Questions to Ask a Truck Finance Broker

Before choosing a broker, ask:

1. How many lenders can you access?
2. Do you work with bank and non-bank lenders?
3. Do you begin with a soft credit check?
4. Do you have an internal credit team?
5. Do you regularly arrange truck finance?
6. Can you assist with new ABNs?
7. Can you arrange low doc finance?
8. Can you assist with private sales and auctions?
9. Who manages the application through settlement?
10. Why is the recommended lender suited to my situation?
11. What is the interest rate?
12. What is the repayment?
13. Is there a balloon?
14. What is the total estimated finance cost?

Frequently Asked Questions

Should I Use a Broker or a Bank for Truck Finance?

The right option depends on your business and application.

An established business with complete financial statements may be well suited to its existing bank. A broker can be useful where the business wants to compare lenders or has a newer ABN, limited documentation, used truck, private sale or more complex credit position.

Can a New ABN Get Truck Finance Through a Bank?

Potentially. Each bank has its own minimum trading and documentation requirements.

Some newer businesses may find additional options through non-bank lenders that assess previous industry experience and future work alongside ABN history.

Is a Truck Finance Broker Better for a Start-Up?

A broker can provide access to several lenders rather than relying on one lender's start-up policy.

This can help when the business needs a lender that will consider industry experience, a work source agreement or low doc application.

Do Truck Finance Brokers Work With Banks?

Yes. An asset finance broker can have access to both bank and non-bank lenders.

TAFS has access to more than 80 lenders.

Can I Get Truck Finance With Limited Financials?

Yes. Selected lenders provide low doc commercial vehicle loans.

The application may use bank statements, ABN information, industry experience and evidence of work instead of complete financial statements.

Can I Get Truck Finance With Bad Credit?

Previous credit issues do not automatically prevent approval.

The available options will depend on the type and age of the credit issue, current conduct, truck value, deposit and overall financial position.

Can a Broker Finance a Used Truck?

Yes. Used truck finance is available through selected lenders.

Vehicle age, kilometres, condition and market value will affect the available options.

Can a Broker Arrange Private-Sale Truck Finance?

Yes. Selected lenders finance trucks purchased privately.

Additional vehicle, ownership and seller checks will be required before settlement.

Does Using a Broker Mean Applying to Multiple Lenders?

Not through the TAFS process.

TAFS begins with a soft credit check and internal assessment before making one formal application to the selected lender.

How Quickly Can TAFS Arrange Truck Finance?

TAFS can arrange approvals in as little as 24 hours for straightforward applications once the required information has been provided.

Applications involving new businesses, private sellers, older trucks or more complex circumstances may take longer.

Compare Truck Finance With TAFS

TAFS can assess your ABN history, transport experience, credit position and proposed truck purchase before comparing suitable commercial vehicle loans through access to more than 80 lenders.

Start with a no-obligation assessment and a soft credit check that leaves no mark on your file. Contact The Asset Finance Shop or apply online at www.tafs.com.au.

The Asset Finance Shop (TAFS) is a commercial asset finance brokerage based in Sydney.
Information on this page is general in nature and doesn't take your personal circumstances into account. Speak to a TAFS broker for options tailored to your business, and to your accountant regarding tax treatment.