The short version
Often you don't need a deposit for truck finance. If you're an established operator with clean credit buying a standard truck, you can usually finance the full amount with no money down.
Lenders ask for a deposit when the deal carries more risk: a new ABN, an older truck, a private sale, past credit trouble or a large loan. Even then it's usually 10% to 20% of the price.
When you can finance with no deposit
No-deposit truck finance is common when you have:
- An established ABN that has been trading and registered for GST for a while.
- Clean credit, for the business and the directors.
- A standard truck at a fair price, bought from a dealer.
Tick all three and a lender will often fund 100% of the truck. It works like any asset finance deal: the truck is the security, so a lender that's comfortable with you and the truck doesn't always need cash up front.
When a lender will want a deposit
A deposit comes up when something adds risk:
- A new ABN. With less trading history, the lender wants you to carry more of the risk. See equipment finance with a new ABN.
- An older truck. Age and high kilometres mean it's worth less and loses value faster. Lenders cover that with a deposit, or by lending a smaller share of the price.
- A private sale. There's no dealer or warranty, and the truck is harder to value, so lenders are more careful. The truck finance guide covers this in more detail.
- Past credit problems. Defaults or arrears can mean you need a deposit to get approved.
- A large loan, or one that already has a big balloon.
In these cases a deposit of 10% to 20% is typical, and it's often what gets a borderline deal approved.
What a deposit does for you
Even when you don't need one, putting money down can help. You borrow less, so your repayments are lower. The lender takes less risk, which sometimes gets you a better rate. And more lenders will look at the deal, which gives a broker more options to work with.
A trade-in counts too. If you're trading in your old truck, the equity in it can be your deposit.
The balloon payment
The other thing you can adjust is the balloon payment. A deposit lowers what you borrow at the start, and a balloon leaves part of the loan to pay at the end. Used together, they set your monthly repayment at a level the truck's earnings can cover.
A broker looks at the deal, the truck and the lenders, and sets the deposit and balloon so the numbers work for your run. Start an application. It takes under a minute, and most enquiries get a response within four business hours.