Sole Trader is a popular form of commercial entity structure for many Australians. As it is quite inexpensive and simple to establish, it is the preference for many individuals moving into self-employment. For those choosing this structure to work as delivery drivers, couriers, produce growers and producers, florists and tradies, they will likely require a vehicle and to purchase it - sole trader van finance.
Operators with this type of structure are eligible for commercial vehicle credit. But sourcing the best rates and most suitable lender to secure the most affordable solution can present time and access issues for operators. By utilising the readily available services of a specialist motor vehicle lending broker, operators may minimise the time and maximise the outcome for their light commercial loan.
Requirements for Approval for Sole Trader Van Loan
The requirements for commercial vehicle credit are to hold an ABN and to provide financials on the operation. These financials or documents can include income tax returns, annual accounts, BAS returns and similar. Enterprises that have been operating for some time, should have accrued these records.
Some lenders require a minimum 12-24 month trading time to be eligible for commercial funding and the presentation of turnover for a minimum period. A situation which can pose an issue for those that have recently set-up their operation.
Where an enterprise has not traded for that length of time and does not have turnover data for the minimum time, they may require approval for funding ‘without financials’. This is known as Low Doc Van Finance and can be sourced primarily through specialist lenders. We have accreditations with these lenders and can assist operators requiring this option. It allows smaller and newer operators access to workable vehicle funding without presenting the full set of documentation usually required.
Due to the structure of sole traders, it is quite common for the personal financials of the trader to be requested with the application.
In regard to GST, being registered is not an essential requirement. But operators may like to consider if they should register for GST. Why? Because many lenders consider registration as a positive when assessing applications. For assistance in considering your choices, refer to the information from the Business Government website.
Sole Trader Van Finance Options
Sole Trader Van Finance can be secured with the choice of the most suitable facility from the selection of Chattel Mortgage, Leasing or Commercial Hire Purchase. These same credit facilities suit all types of light commercials, new and used, with all types of fuel systems. That includes the latest EV models and top sellers such as the VW Caddy, Peugeot Partner, Toyota HiAce and LDV G10.
The decision as to the most suitable credit option rests on whether the cash or accruals method of accounting is used to prepare the accounts; the strategy for the balance sheet; and the tax approach of the business.
In regard to the balance sheet, Leasing can be seen as an option for easing or improving the balance sheet as ownership of the light commercial is with the lender over the credit term. With CHP and Chattel Mortgage the operator accepts immediate ownership, so the light commercial is entered into their books.
As with companies and other structures, sole traders can realise all the tax deductions associated with selected credit facility. The monthly payments are fully deductible with a Lease. CHP and Vehicle Chattel Mortgage allow the light commercial to be depreciated to deliver a tax deduction. The depreciation schedule is according to ATO rulings at the time of acquisition.
As a depreciable commercial asset, the light commercial may be subject to accelerated asset depreciation measures such as Instant Asset Write-off when available.
The best or most suitable product will be the one that meets the individual objectives of the operator. Consulting with an accountant is strongly advised for a professional decision in this regard.
Getting Best Rate on Sole Trader Van Finance
The interest rates vary with the credit facility options with Chattel Mortgage and Commercial Hire Purchase featuring the lowest rate and Leasing slightly higher, across the lending market. The rate offered to a specific business, will be based on the lender’s assessment of the application which includes the credit profile.
With rates also varying across the lending market, getting the best rate can also depend on applying to the right lenders. We save operators time in finding exactly that right lender with our extensive resources, accreditations and our expert capabilities. Your Jade broker will take your details and get back to you asap with a quote with the lowest rate available from across our 80+ lender base.
To decide which vehicle may present the most affordable choice, operators can take advantage of free-to-use finance calculator to generate estimates to use as a guide. Then contact us for an exact quote or call us before even looking at light commercials for pre-approved credit.
Contact Jade Car Loans 1300 000 003 for affordable, best rates sole trader van finance.
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
