- Whether you’re a sole trader, partnership, company, or trust, you can usually apply for business vehicle finance as long as you have an ABN and a stable cash flow.
- Lenders assess factors like trading history, credit score, and how the vehicle will be used, with slightly different requirements for each business type.
- New or credit-challenged businesses still have options. Higher deposits, smaller loans, or personal guarantees can improve your chances of approval.
- Trades, logistics, hospitality, and agriculture often rely on vehicle loans to keep their operations running smoothly and their cash flow intact.
Most businesses need a vehicle at some point, but buying one outright can be expensive. That’s where business vehicle finance comes in, helping you get the wheels you need without compromising your cash flow. But who exactly can apply for a car loan in Australia?
Whether you’re a sole trader, partnership, company, or trust, this guide will walk you through how business vehicle finance works in Australia, who’s eligible, and what you need to boost your chances of approval.
What is business vehicle finance?
Business vehicle finance allows you to purchase a vehicle to use for business purposes while spreading the cost out over time. This could be a car, truck, van, or ute, for example.
There are different types of business vehicle finance, each working a little differently when it comes to ownership, repayments, and tax benefits. Common options include chattel mortgages, hire-purchase agreements, operating leases, finance leases, and novated leases.
Who’s eligible to apply for business vehicle finance?
In Australia, most businesses need to meet a few key requirements to qualify for a business car loan:
- A trading history of 6-12 months minimum
- Business registration as a sole trader, partnership, company, or trust
- An ABN (GST registration isn’t mandatory but can help)
- A healthy credit score
- Proof that you’ll use the car primarily for business purposes
- Up-to-date paperwork to show that your business is stable or growing, and that your cash flow is strong enough to make repayments comfortably
- No current bankruptcy issues
If you’re missing a box or two, don’t worry, there are often ways to strengthen your application (more on this in just a bit).
How does eligibility differ by business structure?
Eligibility for business vehicle finance in Australia can vary significantly depending on the type of business you run. Here’s a quick breakdown:
- Sole traders are usually asked to present their personal credit history and business financials. Approval may be simpler if you’re a long-standing sole trader (6-12 months minimum) with good financial records.
- Partnerships. Lenders will look at both partners’ financial situations, mainly to ensure the business is stable and profitable, and both partners can comfortably manage repayments.
- Companies typically need an ABN, financial statements, and tax returns. A longer trading history and solid cash flow usually means quicker approvals. Directors may be asked to sign a director’s guarantee, which means that if your business defaults, you could be asked to cover the loan personally.
- Trusts are a bit more complex, but lenders aren’t trying to make it impossible. You’ll usually need the trust deed, financial statements, and proof of beneficiaries’ or trustee’s authority to borrow. Once that’s in place, the process becomes more straightforward.
What do lenders look at before approving vehicle finance?
When applying for business vehicle finance, lenders want to be confident that you can handle repayments and look after the vehicle. That means they’ll check things like your credit score, cash flow, trading history, and how the asset will be used.
It might sound strict, but knowing this upfront can help you prepare and improve your chances of approval.
- Credit score and history: A strong credit history shows that you’ve consistently met your financial obligations, which increases your chances of approval.
- Business financials and cash flow: Lenders need proof that your business makes enough money to cover repayments. They’ll look at docs like bank statements, profit & loss statements, and tax returns to understand the seasonality and consistency of your income.
- Trading history: A lot of lenders prefer businesses that have been operating for at least 6-12 months (again, it demonstrates financial consistency and stability).
- Vehicle type and usage: Lenders may want to know how the vehicle will be used for business purposes. Also, lending criteria may vary between commercial and passenger vehicles.
- Industry and risk profile: Things like seasonal revenue fluctuations, economic sensitivity, or high default rates can make an industry higher risk (at least, in the eyes of lenders). This doesn’t mean getting approved is impossible, but it may impact loan terms.
How can businesses without a long trading history get vehicle finance?
As a newer business, lenders will pay even closer attention to your ability to repay your car loan. Strong cash flow will always look good, even with a shorter trading history.
You can also consider taking a smaller loan amount, offering a larger upfront deposit, or providing collateral, all of which reduce the lender’s risk.
A personal or director’s guarantee can also play in your favour, as it shows lenders that you’re committed to repaying the loan even if the business is new. Just make sure to do your due diligence before signing anything.
What options are available for businesses with poor credit history?
A less-than-perfect credit score isn’t the end of the road. Smaller loans, higher deposits, or collateral can all help.
Or, if you don’t need the vehicle urgently, you could work towards a healthier credit score before applying:
- Pay off existing debt
- Diversify your credit
- Avoid sending out too many loan enquiries
- Check for any mistakes on your file (and solve them ASAP)
Which industries usually take out business vehicle finance?
Lenders are more confident approving finance for businesses that depend on vehicles to generate revenue. Common industries include:
- Construction and trades. Builders, electricians, plumbers, and landscapers often need trucks, vans, or utes to transport tools and materials.
- Delivery and logistics. Couriers, small freight companies, and local delivery businesses require a reliable fleet to operate efficiently.
- Hospitality. Catering services and event businesses often use vans or trucks to transport equipment and supplies. Some food businesses also run food trucks to take their business wherever it's most profitable.
- Agriculture and farming. Many farmers and agribusinesses use trucks, utes, or machinery transport vehicles to manage daily operations.
- Service businesses. Real estate agents, cleaning businesses, and pet grooming services, for example, rely on vehicles to reach their clients.
Ready to get your business moving? Whether you need a car, ute, or truck, the right loan can help you buy the asset without draining your cash flow.
Our platform compares finance from over 90 banks and non-bank lenders, with a wide range of loan products to choose from.
From there, we match you with the ones that work for your needs and current financials. We handle the application process and settle funding on your behalf, so you get money exactly when you need it. Easy as. Get in touch today.
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