A garbage truck, whether a rear, side or front loader, is usually financed with a chattel mortgage covering the truck and compaction body. You own it from settlement, secure the loan against it and repay over one to seven years with an optional balloon. Because the hydraulic compaction gear adds value and sees hard use, lenders assess it closely. Overdrive compares 80+ banks and non-bank lenders to structure finance around your collection contracts.
Key highlights
- Chattel mortgage funds the truck and compaction body together.
- Lenders assess the packer, hydraulics and lifter condition.
- Ongoing council or commercial contracts support steady repayments.
- Pre-approval helps you gear up for a new waste contract.
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Funding a compaction unit
Garbage trucks carry specialised compaction bodies, whether rear, side or front loaders, along with hydraulic packers and bin lifters that add significant value and see constant use. Operators generally fund the complete unit with a chattel mortgage, owning it from settlement, securing the loan against it and repaying over one to seven years. A balloon can lower monthly repayments. Waste collection often runs on multi-year council or commercial contracts, which supports predictable finance. Because the compaction gear is specialised and works hard, lenders pay attention to its condition, so a well-maintained unit backed by a contract supports a stronger offer when you compare lenders.
What lenders assess
Lenders look at the truck and the compaction body together. For the body, they consider the packer and hydraulics, bin-lifter condition, capacity and service history, since this gear is central to the truck's value and reliability. For the truck, age and kilometres matter. On the business side, they review your ABN and GST registration, time in waste services, any council or commercial collection contracts, and your credit history. A signed contract strengthens the application considerably. Established operators may access low-doc finance, while newer businesses often benefit from a contract, a deposit or added security to help secure approval and a better rate, subject to lender criteria.
Structure and repayments
Waste contracts tend to provide steady, contracted income, which suits regular monthly repayments, though weekly or fortnightly may work better for cash flow. A balloon of 20 to 40 per cent lowers your monthly outlay and preserves working capital for maintenance, which is significant on hard-working compaction gear. No deposit is common for strong applicants, while a deposit or trade reduces the amount financed and can sharpen the rate. Budget for hydraulic and packer servicing. Indicative rates start from around 6.55% p.a. for strong, asset-backed deals; older trucks, older bodies or weaker credit are priced higher, subject to lender assessment.
Getting pre-approved
Winning a new waste contract often means having a truck ready to roll, so pre-approval helps you gear up quickly. It sets your budget and lets you negotiate as a cash buyer at a dealer, ex-fleet sale or auction. Have your ABN, GST and licence details, your collection contracts, and recent bank statements ready. A broker lodges one application and compares lenders behind the scenes, matching you to one comfortable with compaction units. For eligible applicants, same-day pre-approval and 24 to 48 hour settlement may be available, so you can mobilise for the contract without delay.
Gearing up for a waste contract? Simon Kendrick at Overdrive can compare 80+ lenders, fund the truck and compaction body together and structure repayments around your collection income. Request a free quote for an indicative rate and pre-approval.
Frequently Asked Questions
Does a waste contract help my finance application?
Yes, considerably. A signed council or commercial collection contract shows clear, ongoing income for the truck, which strengthens your application and can support a better rate or larger amount. It is not always essential, but it reassures lenders given the high value and specialised nature of compaction units, subject to lender criteria.
Can I finance a used garbage truck?
Yes. Used garbage trucks, including ex-fleet units, are financed regularly. Lenders assess the truck's kilometres and the compaction body's condition, hydraulics and bin lifter. Older units may attract a higher rate or shorter term, but a deposit, clean credit, a strong ABN and a contract can help you access a competitive offer, subject to lender assessment.
Does the compaction body condition matter?
Yes. The packer, hydraulics and bin lifter are central to the truck's value and reliability, so lenders factor in their condition and service history. A well-maintained body supports a stronger offer, while worn or poorly serviced gear may lead to a higher rate or shorter term. Keeping service records helps, subject to lender assessment.
Is garbage truck finance tax deductible?
Generally, a chattel mortgage may let you claim interest and depreciation as business expenses, and GST on the purchase can often be claimed in your activity statement. Hydraulic and packer servicing may also be deductible. Treatment depends on your circumstances, so always confirm the detail with your accountant.
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