How transport businesses fund trucks: structure, balloons and the cost of standing still

A truck standing in a yard is the most expensive object in the business. Repayments, registration and insurance carry on whether the wheels turn or not. For a transport operator, funding is therefore not only about getting the truck. It is about getting it onto a road, with a driver and a load, early enough that the contract income covers the cost of owning it.

This guide walks through how transport businesses typically structure truck finance, the cash flow around it, and the details that decide whether the purchase works.

What are the main ways to fund a truck?

Most truck purchases use one of four structures, each secured over the vehicle.

Structure	Who owns the truck	Typical feel	Often chosen by
Chattel mortgage	You, from day one, with a mortgage over it	Flexible; GST claimable in the usual way if you are registered	Established operators and owner-drivers
Hire purchase	The lender until the final payment	Similar to a chattel mortgage but with different tax treatment	Operators whose accountant prefers the structure
Finance lease	The lender; you pay for use	Can include a residual at the end	Fleets that rotate trucks
Operating lease	The lender	Lower commitment, possible kilometre limits	Operators who want to hand trucks back

Banks lend on trucks readily to established operators with sound financials, and for businesses that meet their criteria they are often the cheapest source. Many transport businesses also use specialist asset financiers, who understand resale values and fleet cycles. Our guide on financing a truck covers lender checks in more detail.

What are the real running costs behind the repayment?

A repayment is only one line. For a prime mover working long distances, the other fixed and semi-fixed costs commonly include:

• Fuel, usually the largest variable cost.
• Registration, and in some states heavy vehicle charges.
• Insurance, including comprehensive and public liability.
• Tyres, servicing and repairs.
• Driver wages and super, now paid within seven business days of each pay run under Payday Super.
• Tolls, telematics, trailer and body costs.

A lender will ask how these compare with revenue per kilometre or per load. Rather than one headline figure, work out your cost per day for the truck sitting idle, and your margin per day when it works. If a truck needs to run 5.5 days a week to break even, the plan has very little margin for a breakdown.

How does the instant asset write-off apply?

The $20,000 instant asset write-off became permanent from 1 July 2026 for businesses with aggregated turnover under $10m, and it applies to each asset separately. A heavy truck costs well above that threshold, so it is depreciated instead of written off in one go. Smaller purchases, such as tools, load restraints, in-cab devices or a small trailer accessory, may qualify.

This matters for finance in two ways. First, tax benefits of a truck purchase arrive through depreciation over time, not as a single large deduction, which affects how you plan the year’s tax. Second, the structure you choose (chattel mortgage, hire purchase or lease) changes how deductions and GST work. Ask your accountant to compare structures with your own numbers before you sign.

Why does Euro VI matter for the price?

New heavy trucks sold in Australia now need to meet the Euro VI-based ADR 80/04 standard. For purchasers, the points that matter are:

• New trucks tend to cost more than the models they replace, and some run on diesel exhaust fluid and need more complex servicing.
• Older Euro V trucks remain on the road, and their used values and age limits affect finance terms and balloons.
• Lenders check a used truck’s age at the end of the term, because many cap the age they will fund.

Check current details on the National Heavy Vehicle Regulator’s page and talk to your dealer about warranty, servicing network and expected resale.

Where does the cash gap sit in a transport business?

Customers, particularly larger freight and logistics companies, commonly pay 30 to 60 days after invoice. Fuel is paid weekly or by card, drivers every week or two, and repayments monthly. A business running three trucks on 45-day terms can have six weeks of costs outstanding at any time.

There is one genuinely helpful quirk: fuel tax credits. Eligible heavy vehicle operators can claim credits for fuel used on public roads, reported through the activity statement. For a fleet, the credit can arrive as a reduction in the net GST payable or as a refund, which smooths the quarter. It is not a reason to skimp on a buffer, but it should be in your forecast. Check the ATO’s current rules and rates for your vehicles, as they change.

Struggling to line up costs and invoice dates? Tell us roughly how it works and we can see which funding fits.

Which finance fills the gap?

Gap	Option that often fits
Customers pay in 45 days	Invoice finance against freight invoices
Fuel and wages in a slow fortnight	Line of credit
New truck deposit	Term loan or property-secured finance
Repair or tyres	Short-term loan
Trailer, body or refrigeration	Added to the truck facility or financed separately

Invoice finance can work especially well in transport, because invoices from established freight customers are straightforward for a lender to assess. The fee on each invoice should be weighed against the cost of delay, and the structure (whether your customers are told) differs between providers.

What do lenders look for from a transport business?

• The contracts or regular customers that will keep the truck working.
• Experience of the owner and drivers, plus licences.
• Bank statements showing steady receipts and prompt payments.
• The truck: age, kilometres, make, and any specification such as a refrigerated or tipper body.
• Existing debt and how it is secured.
• Insurance, and the plan for repairs and replacement.

For a new owner-driver, a letter from a customer committing work can carry as much weight as a trading history. Our page on owner-driver truckies goes into this.

An illustrative example

This is an invented example. A regional carrier runs two prime movers and wants to add a third, buying a used one at $185k and a second-hand trailer at $42k. It has secured a regular 5-day-a-week run from a produce wholesaler.

The owner arranges a chattel mortgage over five years with a balloon agreed at a conservative level, using the truck as security. Monthly repayments come to about $4,100. Other monthly costs for the new truck, including driver wages and super, fuel, insurance, registration and maintenance, come to about $17,000. The run is invoiced weekly at around $5,400, paid in 45 days.

The first payment from the new run arrives around day 52. Until then, the business has to fund about seven weeks of costs, near $27,000. The owner arranges a $50k line of credit before the purchase, and it is used for about $24,000 at its peak and cleared within three months. Without that, the first fuel and wage bills would have fallen on the existing trucks’ cash.

Mistakes to avoid

• Buying a truck before the work is confirmed.
• Setting a balloon that is higher than the truck is likely to be worth.
• Forgetting the 45-day wait on the first invoice.
• Counting fuel tax credits as spare cash.
• Putting every truck on the same renewal date, so a bad month hits several at once.

Ready to put the truck on the road?

If you are adding a truck, replacing one or just evening out the gap between invoices and bills, it pays to know your options before you sign for a vehicle.

Our enquiry form takes a minute or so, and enquiring does not touch your credit file. Your details do not go out to a long list of lenders; a real person looks at your situation and phones you. Be exact about the truck, the work behind it and the amount, and the first option suggested should fit.

Find out what finance could suit your next truck →