What is a Business Vehicle Loan?

What is a Business Vehicle Loan?
16 Jun

A Business Vehicle Loan is a form of asset finance used to purchase vehicles for commercial or work-related purposes. These loans are specifically structured for businesses and differ from personal car loans, in terms of tax treatment, structure and eligibility.

Whether you're self employed, a sole trader, partnership, company or trust, Business Vehicle Finance is designed to align with your business operations. 

Popular types of Business Vehicle Loans

Depending on how your business is set up, and your goals, you can choose from several finance options:

1. Chattel Mortgage

This is the most common vehicle finance option for businesses. You can take ownership of the vehicle from day one, and the lender uses the car as security. Key benefits include:

  • Ability to claim GST on the purchase price upfront (if registered for GST)
  • Tax-deductible interest and depreciation
  • Flexible repayment terms, including balloon payments
2. Finance Lease

Under a lease, the lender owns the vehicle, and your business leases it for a fixed term. At the end of the term, you can either purchase the vehicle or upgrade. Suited to businesses that regularly upgrade vehicles and don't want to own them outright. 

3. Operating Lease

With an operating lease, you pay to use the vehicle without ownership obligations. It works like a long-term rental, where you make fixed monthly payments that can include running costs like registration and maintenance. It’s a smart option for businesses that value predictability, flexibility, and hassle free vehicle management.

Benefits of Financing a Business Vehicle

Preserve Cash Flow

Avoid large upfront costs and spread payments over time

Tax Advantages 

Potential deductions for interest, depreciation and GST (depending on the structure)

Access Better Vehicles

Finance gives you flexibility to choose the vehicle that best suits your needs, not just what fits your cash reserves

Upgrade with Ease

Structured finance terms make it easier to replace vehicles as your needs evolve

What Lenders Look For

Approval is generally straightforward for established businesses, especially with a clean credit profile. Lenders may assess:

  • Business trading history and financials 
  • GST registration and ABN status
  • Your intended use of the vehicle (must be >50% business use)
  • Credit history of the business and/or directors
  • Value and type of vehicle
  • Property ownership (not used for security purposes)

Some businesses can access Vehicle Finance with low-doc or no-doc options, in some cases.

Why work with a Finance Broker?

A Finance Broker can help you:

  • Access a wider panel of lenders and more competitive rates
  • Structure the loan to best suit your business (and maximise tax benefits)
  • Save time by handling approvals, paperwork and lender communication
  • Plan for the future, including upgrades, refinancing, or multiple vehicle purchases

Final Thoughts

A Business Vehicle is more than just transport, it's a tool that keeps your operations running. Financing that vehicle the right way can make all the difference in how efficiently and affordably your business runs.

Ready to explore your Business Vehicle Finance options?

At RLA, we help businesses of all sizes secure the right vehicle loans, with flexible terms, competitive rates and tailored advice. Get in touch with our expert team today to get started.

Book your Free Consultation Today!