Starting a business is a bold and exciting journey, but for many Australian entrepreneurs, it can also be a daunting task – particularly when it comes to securing a vehicle that’s necessary to carry out the job.
Whether you’re setting up a courier service, launching a trade business, or diving into interstate logistics, a reliable commercial vehicle is often essential. However, if you don’t have a strong credit history, getting financing for that vehicle can feel like an uphill battle.
The good news is that there are ways to move forward, even if traditional lenders aren’t an option. In this article, we’ll explore some practical strategies to help you secure a commercial vehicle without relying on traditional loans, with a spotlight on Rent To Buy solutions – an increasingly popular option for business owners looking to get on the road quickly.
The Roadblocks of Traditional Financing
For many small businesses and sole traders, approaching a bank for vehicle financing can feel like you’ve had the hand brake slammed on you.
Banks often place heavy emphasis on credit scores, financial stability, and asset ownership. If you’ve had financial setbacks in the past, or if you’re just starting out with a new ABN, it’s easy to find yourself locked out of the traditional lending system.
The challenge here isn’t just the lack of access to capital, though, it’s also the time involved. The process of applying for a traditional loan can take weeks, with endless rounds of paperwork and iterations without any indication of what the final outcome will be. For many business owners, that’s time they simply can’t afford to waste.
Fortunately, there are alternative options that allow you to bypass these hurdles and keep your business moving forward.
Rent To Buy: A Convenient Path to Ownership
One alternative that has gained popularity among Aussie entrepreneurs is the Rent To Buy model.
Unlike traditional financing, which requires you to take on debt upfront, the Rent To Buy solution offers a more approachable pathway to vehicle ownership. It allows you to start using a commercial vehicle immediately while making regular rental payments over time. At the end of the rental period – or at certain points during the rental period – you have the option to purchase the vehicle outright.
Take, for example, ARG’s Rent To Buy solution. What makes this programme stand out is that, while ARG does take into consideration a client’s credit score, more focus is placed on the client’s future earning potential (if they get access to the vehicle they need), rather than their past financial mistakes. For new business owners, or those with less than perfect credit scores, this approach offers a lifeline that helps them secure a vehicle even if their credit score isn’t ideal.
Rent To Buy programmes like this are particularly beneficial for tradespeople, couriers, and other service providers who need a reliable vehicle to operate but don’t want to jump through the hoops of traditional financing. With a Rent To Buy solution, you can get your business on the road from day one and work towards owning the vehicle at a pace that accommodates your cash flow.
The Role of an ABN in Securing Flexible Vehicle Solutions
Before diving into any vehicle solution, however, there’s one key requirement that every Australian entrepreneur should aim to meet: having an Australian Business Number (ABN).
An ABN isn’t just necessary for running your business; it also lends legitimacy and credibility to your operations, helping you build trust with suppliers, customers, and even alternative lenders.
While traditional lenders might use your credit score as the main factor in deciding whether to approve your application, having an ABN can be a game-changer when exploring options like Rent To Buy. It signals that you’re operating a legitimate business and opens the door to more flexible financing solutions.
How to Make the Most of Rent To Buy
Starting a business on a budget means making smart decisions about your assets, and a Rent To Buy solution can help you do just that. Here’s how you can make the most of this option:
- Choose the right vehicle: Whether you need a van for deliveries, a ute for trade work, or a prime mover for long hauls across the country, picking the right vehicle can make all the difference in your business operations. A Rent To Buy programme allows you to select the vehicle that best fits your business needs, without being limited by a large upfront payment.
- Manage your cash flow: Rent To Buy solutions typically offer approachable payments, allowing you to spread the cost of the vehicle over several years. This flexibility is crucial for businesses just getting off the ground, as it enables you to manage your cash flow more effectively while still securing the assets you need to grow.
- Stay on top of your credit score: While Rent To Buy programmes like ARG’s focus on your earning potential, it’s still important to stay on top of your financial health. Making efforts to improve your credit score over time can benefit your business in the long run.
Driving Towards a Successful Future
Starting a business with a less-than-perfect credit history might feel like a challenge, but it doesn’t have to stop you in your tracks.
By tapping into flexible solutions like Rent To Buy and prioritising your business’s growth potential, you can break through the financial obstacles that traditional lenders often impose. With the support of companies like ARG, you can access the tools you need to get your business moving, without the pressure of conventional loans.
While your credit history is part of your past, it doesn’t have to dictate your future. With the right approach and backing, you can secure the vehicle you need, launch your business, and steer your path towards long-term success.
