Key Takeaway Table
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Australia’s Road Freight Transport Industry Background
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The road freight transport industry is crucial to trade and commerce in Australia. Through the movement of heavy vehicles like trucks and trailers, goods are transported safely all over the country. Although revenues saw a dip during the pandemic, all signs point to a slowly stabilising industry. Forecasts show that in the next few years, the industry will grow, which gives people the opportunity to start or improve their trucking businesses.
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Leveraging a Recovering and Growing Industry
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Business owners and those who aspire to start their own trucking business can leverage the predicted growth of the industry by taking the right steps. They can focus on upgrading equipment, adopting innovations, applying sustainability practices, and investing in their drivers. Businesses can apply for the right loans to get the funds needed to make all these happen.
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How Business Loans Can Help
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Business loanscan help with several aspects of running a trucking business. They can help fund truck purchases, tech investments, maintenance, repairs, and driver training and development. Loans can also cover cash flow gaps and provide working capital so the business can run smoothly. The funds can also be used to expand the business.
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Types of Business Loans Available to Trucking Companies
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Trucking businesses have access to different business loans.Equipment and asset financecan help fund the purchase of large vehicles.Invoice financecan help business owners access cash despite late payments from customers, so they can pay for immediate needs and have the money to take on new contracts. For other business needs like working capital and emergency expenses, a revolving line of credit can provide business owners with a renewable source of quick funds.
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According to the National Transport Commission, there are 535,366 registered heavy vehicles in the country. These trucks, trailers, and other vehicles are vital to trade and commerce since they facilitate the movement of goods around the country. Industries like retail, manufacturing, construction, and agriculture rely heavily on them. Without the road transport industry, products, raw materials, and other goods won’t get where they need to be.
The industry went through a rough patch during the pandemic, with revenues seeing a 5.1% dip in 2021. However, in the following years, the industry’s revenues showed signs of stability, and the market is expected to recover and grow in the next few years. A forecast from Mordor Intelligence shows that the industry is set to grow at a CAGR of 3.02% from 2024 up to 2028.
For both existing and aspiring business owners in the industry, now is a great time to seize opportunities.
Leveraging a Recovering and Growing Industry
As the industry grows, competition will be one of the main hurdles you will face as a business owner. To gain an edge over the competition, you need to look at where the industry is going and take the necessary steps to improve your business.
Here are some ways you can leverage the predicted growth of the industry in the coming years:
Adopt Technology and Innovation
Aspiring and existing business owners can invest in the latest innovations to improve their operations. You can look into telematics or long-distance data transmission between trucks, predictive analytics, and fleet management software. These technologies can help you optimise route planning, save on fuel, and improve overall fleet performance.
Adopt Sustainability Practices
In Australia, trucks produce 4% of the total carbon emissions. Consumer demand is driving the industry towards sustainability. Right now, only 2% of trucks in the country are electric. Being an early adopter could gain you an edge over the competition.
Focus on Driver Recruitment and Retention
Drivers are at the very core of the trucking industry. Offering competitive wages, benefits, and working conditions can help you attract and retain skilled drivers. Consider targeting younger generations and promoting truck driving as a viable and rewarding career.
Provide Skills Training
You can gain an advantage by investing in skills development and further training for your drivers. This is especially important if you plan to use new tech and practices in your business.
Consider Business Loans
Whether you’re starting a new business or making improvements to your existing one, you will need capital so you can put your plans into motion while the market is good. To do that, you can apply for different kinds of business loans.
How Business Loans Can Help Trucking Businesses
Equipment Purchase and Upgrades
For those who want to start a trucking business or those who want to expand their existing fleet, a business loan can help them gather the funds to take on that large expense. Loans can also help with replacing your current fleet with the latest truck models or with electric trucks.
Working Capital
Business loans can provide working capital to cover day-to-day operational expenses, like payroll, bills, and debt payments. Loans can also help you pay for any emergencies.
Address Cash Flow Gaps
Trucking businesses often face fluctuations in cash flow due to factors like rising fuel prices, delayed payments from clients, or other unexpected expenses. Business loans can help address these gaps to keep the business afloat.
Technology Investments
With the increasing importance of technology in the trucking industry, loans can be used to invest in telematics, GPS tracking, and other software solutions that improve fleet management.
Maintenance and Repair Costs
Maintenance and repairs are major expenses for a trucking company. Business loans can help cover the costs of regular maintenance and unexpected repairs. The funds can also cover lost revenue while your trucks are being repaired.
Market Expansion
Loans can support the expansion of the business into new markets or regions. This could involve opening new branches, establishing partnerships, or targeting new customers.
Training and Development
Loans can be used for driver and employee training programs, ensuring your staff is skilled and updated on the latest industry trends.
Business Loans for Trucking Businesses
There are a number of loan solutions available for road transport businesses. The loan terms, interest rates, processing speed, and requirements will differ across lender types. Traditional banks will usually require stronger businesses, consistent profits, and full financial documentation for their applications. Meanwhile, non-bank lenders will have low or no doc options and can approve your loan even if you have ATO tax debt.
Here are some loans you can apply for to help your trucking business:
Equipment and Asset Finance
Equipment and asset finance allows businesses to purchase the necessary equipment and machinery for their daily operations. The equipment you purchased is considered the security for the loan; thus, it's easy to get approval from lenders. Some lenders will approve loans for purchasing older or secondhand truck models as long as they are still viable.
Invoice Finance
Customer payments don't always come on time, which can cause financial strain on businesses. Invoice finance is a loan solution that allows borrowers to access a percentage of their invoices immediately. You can access up to 85% of an invoice’s value on the same day you write it. That way, you can have the cash to pay for daily expenses and to take on new projects.
Revolving Lines of Credit
A revolving line of credit is a financial tool that helps business owners get access to short-term funding quickly. This type of financial tool helps with pressing expenses like working capital. Typically, a lender will set a credit limit. As the borrower, you can draw any amount as long as it's within the limit. Interest will only be charged on whatever you draw. Once you repay, the limit renews, and you can borrow from the fund again. Lenders can offer secured or unsecured lines of credit. If you need an unsecured line of credit like an overdraft, you can turn to non-bank lenders. You can get limits of up to $500,000 approved quickly and with low doc requirements.
Start and Grow Your Trucking Business with the Right Loans
Business loans are essential to trucking business owners, helping you purchase equipment, pay for repairs, and obtain funds for daily operational expenses.
We are loan experts who understand the specific needs of trucking businesses in the changing landscape. We can help you get access to the best terms and rates to help you get the funding you need for your business to thrive. Talk to us today.
